Landmark green iron plant produces first hydrogen

From the newsletter

The HyIron Oshivela Green Hydrogen Project in Namibia, Africa’s first green iron plant, has reached a key milestone with the successful production of its first green hydrogen. The  gas will be used to produce direct reduced iron (DRI), which will be exported to Europe to help decarbonise the region’s steel sector.

• Namibia’s green iron milestone positions Africa as a potential supplier in the global low-carbon steel market. With abundant iron ore and renewable energy, other countries like South Africa and Mauritania could follow.

• The EU’s Carbon Border Adjustment Mechanism (CBAM) favors low-carbon steel imports, boosting Namibia’s green iron prospects. However, most African nations lack policies and investment frameworks for green hydrogen and steelmaking.

More details

• HyIron, a German-Namibian company engaged in decarbonising iron production. has been developing the Oshivela project since its launch in April 2024  in partnership with German firms CO2 Grab, TS Elino and LSF. 

• Located in the Erongo region, central-western Namibia, the 12 MW electrolyser plant aims to produce 0.015 million tonnes per annum (Mtpa) of DRI in the first phase, cutting 27,000 tonnes of carbon emissions per year. Plans are underway to scale production to 1 Mtpa, reducing emissions by 1.8 million tonnes annually.

• “This marks a pivotal moment for HyIron and for Namibia's green industrialisation ambitions,” the company stated in a LinkedIn post, adding, “To see it operational in less than a year is a remarkable feat of collaboration and efficiency.”

• HyIron acknowledged various partners in the project, including Germany’s Federal Ministry for Economic Affairs and Climate Action (BMWK), which invested $14 million in the project, along with the Namibian government and more than 60 Namibian Small and Medium-sized Enterprises (SMEs) that were involved in the construction of the plant.

• The global steel industry accounts for nearly 8% of carbon emissions, making it one of the hardest sectors to decarbonise. Green hydrogen-based direct reduced iron (DRI) is emerging as the future of low-carbon steel production, and Africa is well-positioned to play a pivotal role in this transition.

• With vast renewable energy resources (solar and wind) and large iron ore reserves, African nations have the potential to become major suppliers of green iron and green steel. Namibia’s Oshivela project marks a significant step in this direction, proving that Africa can move beyond raw material exports and become a leader in low-emission industrialisation.

• Beyond Namibia, South Africa, the continent’s largest iron ore producer, mined over 57 million metric tons in 2023 and has outlined a national decarbonisation roadmap to transition to green steel by 2050. Mauritania, Africa’s second-largest iron producer, is also advancing green iron production and positioning itself as another key player in Africa’s emerging green steel value chain.

• The country’s state-owned Société Nationale Industrielle et Minière (SNIM) has partnered with CWP Global on Project AMAN, a green iron production and export hub. This initiative will use green hydrogen to convert iron ore into green Hot Briquetted Iron (HBI) for export, primarily targeting European steelmakers. Mauritania aims to produce 12.5 million tonnes of green hydrogen annually by 2035 and capture 1% of the global green steel market by 2050. 

• Other African nations are also poised to enter the green iron sector. Guinea, home to the Simandou iron ore project, boasts one of the world’s largest untapped high-grade iron ore deposits. Although infrastructure challenges have slowed development, its renewable energy potential makes it a strong candidate for future green iron production. In West Africa, Liberia and Sierra Leone hold significant iron ore reserves, including Bong and Western Cluster in Liberia and Tonkolili and Marampa in Sierra Leone.

• Meanwhile, in East Africa, a Commonwealth study suggests that the East African Community (EAC) could develop a billion-dollar green steel ecosystem, leveraging iron ore reserves and renewable energy to build a low-carbon steel industry.

• However, realising this potential remains a challenge. Most of these countries still export iron ore in raw form rather than investing in local green iron and steel production. The biggest obstacles include financing and infrastructure development. Large-scale green hydrogen and green iron projects require substantial capital, yet many African nations lack the funding mechanisms that have enabled projects like Namibia’s Oshivela, where German investment was instrumental in bringing the initiative to life.

• Beyond financing, policy gaps also pose a barrier. While Africa possesses ample iron ore resources, few nations have developed comprehensive strategies to move beyond raw material exports. Without strategic industrial policies, the continent risks becoming a supplier of green iron rather than maximising the economic benefits of domestic green steel production.

• Technology and logistics add another layer of complexity. Scaling green iron production will require advancements in cost-effective electrolysis technology, efficient water resource management and robust transportation infrastructure. As African countries position themselves as green iron suppliers, overcoming these logistical barriers will be critical to ensuring long-term competitiveness in the global steel industry.

Our take

• Africa’s role in the green steel market hinges on addressing investment, policy and infrastructure challenges. Without strategic funding, clear regulations and modern infrastructure, the continent risks remaining a raw material exporter rather than a key player in the global green steel value chain.

• The Oshivela project proves that green iron production is viable in Africa, but one project alone won’t transform the continent’s role in the global steel industry. Other nations must accelerate investment, streamline regulations and foster innovation to build a competitive green steel sector.

• Africa cannot develop a green steel industry in isolation. Strong partnerships with investors, technology providers and policymakers—both locally and globally—*will be crucial. Countries that cultivate these alliances will lead the transition, while those that don’t may struggle to move beyond raw material exports.