Japan's largest steel producer Nippon Steel will study introducing electric arc furnaces (EAFs) at its main production complexes to accelerate the company's decarbonisation.
Nippon Steel will replace one of the basic oxygen furnaces at its Kyushu steelworks in south Japan's Yawata area with an EAF after carrying out internal studies, the company announced during its 2022-23 fiscal year result announcement. The company will also introduce another EAF at its Setouchi complex in west Japan's Hirohata area, in addition to one launched in October 2022.
The EAF projects aim to accelerate the company's decarbonisation drive to become carbon neutral by 2050, according to Nippon Steel. The length of the transition period was undisclosed as it awaits the study results. But the company expects to complete the projects to meet its mid-term target of reducing greenhouse gas emissions by 30pc from 2013 levels by 2030.
The EAF transition could make a drastic change to the company's steel production. "The two candidate sites for the EAF shift are Nippon Steel's representative mass production bases for high-grade steel. Both areas intend to bring together the outcomes of the technologies under development and to become quickly engaged in making carbon neutral high-grade steel", Nippon Steel said.
Nippon Steel also plans to boost its stakes in overseas mining projects, aiming to raise its offtake ratio of iron ore and coal higher than current average of around 20pc. This is to avoid profit losses that uncertain raw material markets may cause along with securing long-term material supplies, according to the company. "Business not procurement", the company stressed in its results announcement.
But the company did not disclose further details about buying stakes of Elk Valley Resources (EVR), a subsidiary of Canadian mining firm Tech Resources. The Japanese steel firm had entered into an agreement in February to acquire up to a 10pc stake in EVR, which is expected to be spun off from Teck. But the Canadian firm withdrew the separation proposal before its shareholders were scheduled to vote on the plan at a meeting on 26 April, following Switzerland-based Glencore proposed unsolicited acquisition of Teck .
"We understand that Teck will pursue a simpler and more direct separation plan. Nippon Steel will consider future measures through discussions with Teck", a company representative told Argus.
