JSE-listed group Sasol and ArcelorMittal South Africa (AMSA) have announced a joint development agreement to advance studies into two potential green-economy projects, including the potential production of green hydrogen in Saldanha Bay, which could be used to produce green steel.

The two companies will also pursue a Vaal carbon capture and utilisation (CCU) study, whereby renewable electricity and green hydrogen could be used to convert captured carbon from AMSA’s Vanderbijlpark steel plant into sustainable fuels and chemicals.

AMSA believes the  initiatives have the potential to position AMSA as Africa’s first green flat-steel producer.

At its Saldanha Works, which is currently mothballed, green hydrogen could be employed to produce direct reduced iron (DRI) through the mill’s Midrex facility. The Vaal CCU study, meanwhile, will explore capturing 1.5-million tonnes a year of unavoidable industrial carbon dioxide captured from the Vanderbijlpark Works and transporting it to Sasol’s Sasolburg and Ekandustria operating facilities where, together with green hydrogen, it could eventually replace natural gas as a feedstock to produce sustainable chemicals.

Sasol also announced that it has signed a memorandum of understanding with Freeport Saldanha Industrial Development Zone to develop a globally competitive green hydrogen hub and ecosystem within Saldanha Bay.

“These potential projects are an important kick-start to our decarbonisation journey and create an exciting opportunity to contribute to the South African government’s aspirations to transition to a green economy,” AMSA CEO Kobus Verster said in a statement.

“Just as importantly, by maximising the utilisation of our installed assets, we will also be stimulating economic growth in our host communities,” he added, noting that the projects could drive the re-industrialisation of both the Saldanha and the Vaal regions.

Sasol energy business executive VP Priscillah Mabelane expressed enthusiasm for the prefeasibility and feasibility studies, which she said could unlock South Africa’s potential to be a global green hydrogen and derivatives producer.

“These studies are anchored by the local need for green hydrogen and sustainable products, cementing Sasol as the leading contributor to the development of Southern Africa’s green hydrogen economy,” Mabelane said.

Both industrial groups have stated goals of achieving net-zero carbon emissions by 2050.