Stegra is considering the construction of a pelletizing plant in Sweden

Metallurgical startup Stegra (formerly H2 Green Steel), the Port of Narvik and Kaunis Iron, which operates an iron ore mine in Pajala, Sweden, have signed an agreement to explore the possibility of building a pelletizing plant. This is stated in the message of Stegra.

As part of the project, the partners aim to create sustainable pellet production. Construction of the plant should begin in 2027, and its launch is expected in 2030. It is planned to be located on the territory of the former airport in Narvik, next to the current Narvik port.

As noted, this agreement (memorandum of understanding) is one of the ways Stegra is considering for long-term local supply of DR pellets, which will further reduce the climate footprint of the plant in Boden, where the company will produce green steel.

“In the long term, we expect to see an increased demand for DR pellets as the global steel industry goes green. Through this collaboration, Stegra looks forward to exploring opportunities with our partners, Narvik Municipality/Narvik Port and Kaunis Iron, to secure a potentially strong local supply of DR pellets,” said Louise Orré, Chief Procurement Officer at Stegra.

According to Kaunis Iron, this facility will also contribute to regional growth and strengthen the international supply chain, which in turn will ensure the company’s long-term sustainability. Currently, Kaunis Iron exports approximately 70% of its products to Asia, with shipping costs accounting for a significant portion of the final price.

“Establishing a pelletizing facility in the Nordic countries represents a strategic opportunity for Kaunis Iron. It will ensure a stable supply chain for our customers, optimize logistics and reduce our carbon footprint. In addition, the demand for DR pellets in Europe is expected to grow. Thus, this project supports the entire European steel industry,” said Kaunis Iron CEO Klas Dagertun.

The project is currently at an early stage of evaluation.

As GMK Centerreported earlier, in September this year, Stegra received the first €100 million in state aid from the Swedish government. The total amount of this support package approved by the European Commission is €265 million.