The Japanese steel maker, operating under the Kobelco brand name, plans to bring the MIDREX Process, deployed by its Midrex Technologies subsidiary, to the planned venture, for which it has signed a non-binding agrrement with Vale and Mitsui.

MIDREX is a direct reduction ironmaking technology which uses natural or coal-derived gas to reduce iron ore for use in steelmaking. This reduces CO2 emission levels compared with the the blast furnace method. The technology is being used to produce 60% of the world's direct reduced iron (DRI), Kobelco claims.

Trading and investmenty company Mitsui said in a separate statement that Tecnored Desenvolvimento Tecnológico, a subsidiary of its investee Vale, is developing a low carbon pig iron process through the use of energy sources such as biomass, syngas and hydrogen.

"Together with these processes, the new joint venture would utilize Mitsui's marketing and business development know-how to provide low CO2 metallics and iron making solutions to the global steel industry," Mitsui said.