(Bloomberg) -- Companies controlled by billionaire Alisher Usmanov will build a plant in central Russia to supply greener products used to make steel amid a growing focus to clean up the industry.
A joint venture between USM and its Metalloinvest Holding Co.'s iron ore mine will invest 40 billion rubles ($540 million) to build a facility to make 2 million tons of hot-briquetted iron, or HBI, a year, the companies said Sunday. The plant, in Russia's Kursk region, will begin operations in 2024.
HBI is a briquetted form of direct reduced iron, and while it's a more expensive ingredient in steel production, it leads to lower emissions. Turning the steel sector greener is crucial in the fight against climate change, with the industry accounting for about 7% of global carbon emissions.
“This is the start of an important project for the Russian metals and mining industry,” USM Chief Executive Officer Ivan Streshinsky said in a statement. It “will further strengthen our country's leadership in the global market for HBI, the base product for the green steelmaking of the future,” he said.
The joint venture signed an accord with Primetals Technologies and Midrex Technologies, a supplier of direct reduction iron-making technology, to work on the project. USM will hold 55% of the venture with the rest held by Metalloinvest's mine, which will supply iron ore pellets to the new HBI plant, planned to be one of the world's largest.
Metalloinvest itself already produces almost 8 million tons of HBI or DRI annually.
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