Ferrexpo inks MoU with Salzgitter Flachstahl

24th May 2024 07:05

(Sharecast News) - Ukraine-focussed mining company Ferrexpo has signed a memorandum of understanding with Salzgitter Flachstahl for the supply of high-quality direct reduction iron ore pellets for low-carbon steel production.

Ferrexpo's DR pellets will be used as part of the SALCOS programme, in which Salzgitter has been incrementally converting its steel production to hydrogen-based processes and technologies. The SALCOS programme will be completed from a technical perspective by 2033.

The FTSE 250-listed group added that as part of the MOU, Ferrexpo and Salzgitter Flachstahl will also seek to identify the most suitable raw material feed strategies for hydrogen-based steel production in direct reduction plants as well as optimising their green logistics chains, freight and inventory management.

Acting chief marketing officer Yaroslavna Blonska said: "Ferrexpo and Salzgitter have been working together since 2016. As Europe transitions to greener steel production, it is gratifying to have agreed terms for our cooperation well into the future. Ferrexpo's DR pellets can lower steel-making emissions significantly as part of the SALCOS programme.

"The agreement with Salzgitter reinforces Ferrexpo's position as a leading supplier in Europe and will also benefit the wider Ukrainian economy during a challenging time and subsequently during the post-war reconstruction period."

As of 1010 BST, Ferrexpo shares were down 0.45% at 44.70p.

Reporting by Iain Gilbert at Sharecast.com