Erongo green iron project secures key offtake agreement

A major milestone has been reached for the green iron project in the Erongo region with the announcement of HyIron’s first significant offtake agreement.

The announcement was made by chief executive and co-founder Johannes Michels during a media engagement event at the project site near Trekkopje on Tuesday.

German steelmaker Benteler will buy up to 200 000t of direct reduced iron (DRI) from the company, Michels said.

This is more than 13 times of HyIron’s production capacity of 15 000t in the current first phase of the project’s development.

The company has also received enquiries from several other interested companies already, Michels said.

Minister in the Presidency Christine //Hoebes also attended the event.

“This milestone contract will serve as the foundation for HyIron’s future phases of production,” she said.

“As we position ourselves as a vital player in the global green supply chain, Namibian exports will shine brightly.”

The initial phase required investments of 30 million euros (about N$574 million), of which 13 million came in the form of grants from the German government.

The remaining sum was mustered by the company’s founders.

HyIron expects the second phase of development to begin in mid-2025, which will result in a tenfold increase of solar power capacity, according to Michels.

It will likely require investments totalling 230 million euros (about N$4.39 billion), and the process of engaging investors is almost completed, he said.

The third phase is envisioned to start in 2026 and will once again increase capacity by a factor of 10.

This will require another 2.3 billion euros (about N$43.9 billion).

By 2030, HyIron aims to produce two million tonnes of DRI per year.

HyIron’s DRI production process is entirely carbon free due to its use of hydrogen as a fuel. The water utilised in the process is recycled infinitely.

Therefore, no water source is being depleted.

“We have started construction in April this year, taking just six months to build Namibia’s second-largest solar power plant and the world’s first green iron plant,” Michels said.

The construction process employed more than 60 small and medium enterprises from Namibia.

Using only Namibian companies is also planned for the next phases of development, he said.

HyIron on Tuesday installed two electrolyser units with a combined capacity of 12MW, the first in the country and the largest in southern Africa.

This marks the addition of the final pieces of complex equipment at the site, with production expected to start early next year.
Iron ore for DRI production will be sourced from the Kunene region and South Africa’s Northern Cape.

HyIron also expects iron producers from all over the world to bring their ore to Namibia to test its viability in the company’s production process.

In the long run, the company hopes to benefit from the upgrading and extension of TransNamib’s rail infrastructure for the delivery of its iron ore.

HyIron is currently in the process of launching a similar project in Australia.

The company is also considering projects in Angola and Brazil, as well as in up to four additional locations in Namibia, Michels said.