Brazil’s miners, metals firms powering up for a greener future

Mining and metals companies operating in Brazil are rapidly transforming their energy supplies as a key part of their efforts to reduce greenhouse gas emissions.

Large companies have embarked on this journey, though it remains an ongoing challenge as new solutions emerge.

Norway’s Norsk Hydro, which operates bauxite mines and an aluminum refinery in Brazil, has invested 8.8bn reais (US$1.58bn) in projects aimed at decarbonizing its energy matrix.

"We’re replacing fuel oil with natural gas in our operations and expanding the use of renewable energy, such as solar and wind. But we’re not stopping here. We’re evaluating new solutions to further reduce greenhouse emissions, including green hydrogen, bioenergy, and other technologies that may emerge," Anderson Baranov, CEO of Norsk Hydro in Brazil, told BNamericas.

The company aims to achieve a 30% reduction in CO2 emissions by 2030 and reach net-zero emissions by 2050.

Other major companies are in the midst of similar efforts.

This week, Brazilian mining giant Vale completed the acquisition of full control of power generation company Aliança Geração de Energia.

Vale agreed to pay 2.7bn reais for the 45% stake in Aliança Geração de Energia that it did not already own. In 2015, the mining firm created the joint venture with Cemig GT – a subsidiary of Minas Gerais energy firm Cemig – with Vale controlling a 55% stake.

Aliança Energia’s generation capacity is strategic for maintaining Vale’s renewable energy matrix in Brazil.

Aliança Energia’s asset portfolio consists of seven hydroelectric plants in Minas Gerais state and three wind farms in the states of Rio Grande do Norte and Ceará. Together, these facilities have installed capacity of 1,438MW and average physical guarantee of 755MW, according to Vale.

Vale aims to reduce its scope 1 and 2 emissions by 33% by 2030 compared with 2017 levels and to achieve 100% renewable electricity consumption in its Brazilian operations by 2025 and globally by 2030. The company also plans to achieve net-zero scope 1 and 2 emissions by 2050.

Meanwhile, ArcelorMittal, the largest steel producer in Brazil, has announced its intention to transition from coal to natural gas and, eventually, to green hydrogen.

Erick Torres, CEO of ArcelorMittal Pecém, a company unit in Ceará state, emphasized that the company seeks to achieve self-sufficiency in energy generation and supply surplus energy to other customers.

“There is the possibility of producing hydrogen, an initiative that the company is exploring both globally and in Brazil, as an alternative to support decarbonization in the steel sector. The company is committed to this path and is a pioneer in the energy transition, with a goal of achieving carbon neutrality by 2050,” Torres told O Povo, a local newspaper.

Mining and metals companies are not only pursuing solutions to reduce emissions but are also working to mitigate the risks associated with energy shortages by exploring possibilities for self-generation.

“The Brazilian energy matrix is dominated by hydropower, and during periods of low rainfall, we have to resort to thermal plants, which are more expensive and polluting. In more extreme cases of persistent low rainfall, there is a risk of energy shortages, which, if they occur abruptly, can cause severe damage to company operations, including the maintenance of equipment. Given this scenario, firms are seeking self-generation solutions,” Janaina Donas, president of aluminum association Abal, told BNamericas.

Mining companies in Brazil are expected to invest US$10.7bn between 2024 and 2028 in socio-environmental initiatives, up from US$6.55bn in 2023-27, according to industry association Ibram. Most of these investments are focused on reducing greenhouse gas emissions, with a focus on new energy generation solutions.