[Ferro-Alloys.com] Sweden’s H2 Green Steel is in talks with governments in Canada to build a factory in northern Quebec, as the young firm tries to deliver on a promise to customers — steel produced with minimal carbon emissions.

The company is just starting on construction of its first plant in Boden, Sweden, with an ambitious goal to begin production by late 2025. Supply agreements have been signed with automakers including Mercedes-Benz Group AG.

“We bring with us a portfolio of customers who want to have supply in North America,” H2GS Chief Executive Officer Henrik Henriksson said in an interview with Bloomberg News in Ottawa, where he was part of a Swedish delegation led by business mogul Marcus Wallenberg to meet officials including Prime Minister Justin Trudeau.

Stockholm-based H2GS was launched in 2021 by private equity veteran Harald Mix’s investment vehicle Vargas Holding AB, and includes backers such as Spotify Technology SA billionaire Daniel Ek.

Vargas is also behind Northvolt AB, which recently announced plans for a C$7 billion ($5.1 billion) electric vehicle battery plant near Montreal.

The potential Quebec green steel project would be located on a 500-acre site in the city of Sept-Iles, northeast of Montreal, and require an investment of between €3 billion ($3.2 billion) and €6 billion. One plan would see H2GS build a “green iron” plant and a giant electrolyzer powered by renewable energy that would supply the site with hydrogen, replacing the use of carbon-intensive coal. The iron would then be exported.

A more ambitious scenario would include a full steel mill requiring as many as 2,000 workers, similar to the Boden site.

“It will depend on the dialogue we have with authorities in Canada regarding power allocation,” explained Henriksson. The firm is looking for as much as 700 megawatts of electricity — about 1.5% of Quebec’s actual capacity. Peak demand can create bottlenecks on the grid during winter, and government-owned utility Hydro-Quebec has become more selective about projects as demand surges for its low-cost clean power.

H2GS executives also seek to benefit from access to the St. Lawrence River for shipments and the region’s iron ore reserves, in particular from Rio Tinto’s Iron Ore Co. of Canada and Champion Iron Ltd.

“Fairly early, we could see that Quebec has this perfect place with a combination of logistics ready and a certain quality of iron ore,” said Kajsa Ryttberg-Wallgren, an H2GS executive vice-president. Still, a single condition prevails before going further: “No green power, no project.”

Steel production, which has relied on many of the same production techniques for more than a century, accounts for about 8% of total energy system emissions, according to the International Energy Agency.

Source:(Bloomberg) 

• [Editor:tianyawei]