Vale has concluded negotiations with the US Government’s Department of Energy (DOE) Office of Clean Energy Demonstrations and will commence Phase 1 of the project to develop an industrial-scale briquette plant in the state of Louisiana. In this phase, more than US$ 3.8 million of awarded funds will be applied to conduct engineering studies and community engagement throughout the year of 2025.

The award granted to Vale USA LLC (a wholly-owned affiliate of Vale) is a Cooperative Agreement within the DOE’s Industrial Demonstration Program (IDP), part of the Bipartisan Infrastructure Law and Inflation Reduction Act funding. The Agreement allocates up to US$ 282.9 million throughout the project’s timeframe (into 2031).

This project envisages industrial-scale production of Vale’s innovative iron ore briquette, customized for the direct reduced iron (DRI) route. The plant’s intended capacity is 1.5 million tons per year, with potential to expand. Its location, along the Mississippi River in the River Parishes region, Louisiana, is favorable for access to current and potential end-users in the US market. Compared to traditional iron ore pellet production, this innovative technology offers a significant reduction of CO2 emissions, sulfur oxides (SOx), and nitrous oxides, in a process with minimal water use.

The selection by the DOE reinforces Vale’s commitment to innovate and partner up to deliver sustainable results on decarbonization. According to Gustavo Pimenta, Vale’s CEO, this is an unprecedented opportunity. “We believe it represents a critical path for the validation of our customer-centric, innovation-led strategy to scale transformative solutions that enable our clients to create a more efficient and sustainable steel sector. This is especially true for the US market, already a leader in EAF steel production and where we see increased demand for low-emissions ore-based metallics. DOE’s selection of Vale for this Cooperative Agreement is an honor, and a great challenge to embark on together with industry partners and local community and workforce stakeholders.”

The iron ore briquette contributes to achieving Vale’s commitment to reduce 15% of its scope 3 net emissions by 2035. The company also seeks to reduce its absolute scope 1 and 2 emissions by 33% by 2030 and achieve neutrality by 2050, in line with the Paris Agreement ambition.