Monsters of Rock: Could this Aussie firm’s ZESTY tech crack the green steel equation?
There’s a new Aussie player in the green steel space and they have nothing to do with Andrew Forrest.
A favourite of ESG investors across Australia and the world, Calix has shot up by more than 600% over the past 12 months on growing enthusiasm around its low emissions lime and cement technology LEILAC.
That is a calcination process which captures CO2 emissions as they are released from raw limestone, avoiding between €14-24 per tonne of CO2 in the cement making process.
It is now worth $1.2 billion, soaring by 20% yesterday to $7.34 a share after announcing it has filed a patent to apply its core kiln technology to making iron.
This it has called the Zero Emissions Steel TechnologY process or ZESTY.
The not so well kept secret about steel production is for each tonne of raw iron produced in the blast furnace process around 1.8t of CO2 is produced.
The steel industry accounts for something like 8% of the world’s CO2 emissions.
Steel can be produced using a direct reduced iron process, a form of which Sweden’s Hybrit consortium has powered with renewable hydrogen to create the world’s first “green iron” for delivery to carmaker Volvo.
What Calix says is that this still requires a large amount of hydrogen to be created for each tonne of iron to be produced and requires iron ore fines to first be pelletised to minimise loss, making the process (and other forms of DRI that use natural gas) expensive.
Calix claims its technology would be able to reduce iron ore to iron in a hydrogen atmosphere at between 600-800C, about 1000C lower than a normal blast furnace and be electrically heated, meaning it could be powered by renewables.
The company says hydrogen would only be consumed as a fuel, not as a reductant, lowering input costs and avoiding the need to pelletise iron ore fines first.
Initial testing of Calix’s process is underway at the Imperial College in London, with Calix planning to scale-up testing at its Bacchus Marsh facility in Australia if successful.
“These are early days for the Calix ZESTY technology, however, given the materiality of both the potential for our technology in iron and steel production and the size of the environmental challenge, being similar to the one our LEILAC business is addressing, we will be pursuing this opportunity as quickly as possible – the world cannot wait any longer,” Calix CEO Phil Hodgson said.
The race to produce green steel is on, but the field has its doubters. BHP chairman Ken Mackenzie, whose company sold its 80% share in the BMC coal mines in Queensland to Stanmore Coal (ASX:SMR) this week told shareholders at its AGM yesterday met coal would be used in the steelmaking process for years to come.
Markets a vo-la-tile these days and the big iron ore miners who charged to the top of the leaderboard this morning fell back into the pack as the day wore on.
Fortescue (ASX:FMG) retreated from a stunning morning session when it rose more than 5% to climb above $16, falling in the afternoon to finish at $15.75, a 1.94% gain.
Battery metals stocks picked up the mantle with lithium’s IGO (ASX:IGO) up 4.78% to $9.86, Pilbara Minerals (ASX:PLS) 4.27% higher to an all time high of $2.44 and Orocobre (ASX:ORE) up 3.53% to $9.68.
The materials index remained strong with diversified miners, lithium plays and gold producers driving it to a 2.28% gain today.