Green steel production is gaining significant momentum across Africa, with several countries emerging as frontrunners in this transformative industry. By leveraging unique advantages such as abundant renewable resources, rich mineral deposits, and strategic geographic positions, these nations are positioning themselves at the forefront of sustainable steelmaking. This article examines the key African countries leading the charge in green steel, the competitive strategies they are employing, and the potential impacts on regional development and global markets.
🌍 Key African Frontrunners in Green Steel
1. Namibia: The Green Hydrogen Pioneer
Namibia has positioned itself as Africa’s hydrogen superpower, achieving a landmark with its HyIron Oshivela plant. This facility is set to produce 15,000 tons of direct reduced iron (DRI) annually using green hydrogen generated from solar and wind power, with commercial production expected to begin by late 2025. The project aims to avoid 27,000 tonnes of CO₂ emissions per year, equivalent to half of Namibia’s power industry emissions. A key enabler has been the government’s Green Industrialisation Blueprint, which prioritizes creating a conducive investment climate and fast-tracking project approvals. This focused execution demonstrates how political commitment can accelerate green industrialization .
2. North African Nations: Strategic Proximity to Europe
Countries like Egypt, Algeria, Libya, and Mauritania are capitalizing on their proximity to European markets to build competitive advantages in green steel. The EU’s Carbon Border Adjustment Mechanism (CBAM), effective from January 2026, is driving demand for low-carbon steel inputs, and North African producers are responding with significant DRI projects. For instance, Mauritania’s state-owned SNIM, in partnership with ArcelorMittal, is developing a 2.5 million-tonne green pellet and DRI plant. Similarly, Egypt is advancing a €10 billion DRI plant in the Suez Economic Zone. These nations benefit from shorter shipping distances to Europe compared to Gulf competitors, reducing both logistics costs and Scope 3 emissions .
Table: Major Green Steel Projects in North Africa
| Country | Project/Initiative | Planned Capacity (Million Tons/Year) | Key Partners |
|---|---|---|---|
| Mauritania | Green pellet & DRI plant | 2.5 | ArcelorMittal, CWP Global |
| Egypt | Suez Economic Zone DRI plant | 2.5 (expandable to 4) | SMS Group (Germany) |
| Algeria | DRI plant | ~2.5 | Copresud, CEIP Scarl (Italy) |
| Libya | DRI plant (LISCO) | 2.0 | Danieli (Italy) |
3. South Africa: Leveraging Industrial Infrastructure
South Africa is pursuing a more diversified approach, leveraging its existing industrial base. The country’s Steel Sector Masterplan targets carbon neutrality by 2050 through increased use of renewables, gas substitution, and hydrogen economy development. While large-scale green hydrogen projects like the Boegoebaai project are planned, a notable trend is the rise of mini-mills using scrap metal in electric arc furnaces (EAFs). These mills emitted four to five times less carbon than primary steel producers in 2024. This highlights a pragmatic pathway: combining scrap recycling with future DRI production to mitigate potential scrap shortages and deepen decarbonization .
4. Angola: Cost-Effective Gas-Based Transition
Angola offers a compelling case for a transitional approach using its abundant and low-cost natural gas. With gas prices around 1.5−2/MMBtu∗∗(comparedtointernationalaveragesof3-4), Angola can produce gas-based DRI with 50% lower emissions than traditional blast furnaces. This provides a financially viable stepping stone while establishing the industrial foundations for a future shift to green hydrogen. Additionally, Angola’s low electricity costs ($0.02-0.03 per kilowatt-hour**) from hydropower further enhance the competitiveness of its steel production .
💡 Drivers of Green Steel Development in Africa
Several factors are catalyzing the growth of green steel across the continent:
- Favorable Policies and Master Plans: National strategies, such as South Africa’s detailed sectoral roadmap and Namibia’s streamlined regulatory approvals, are crucial in attracting investment and guiding development .
- Financing and International Support: Multilateral lenders are providing essential funding. For example, the IFC extended a $25 million loan to Egypt’s Kandil Steel for sustainable flat steel manufacturing. However, the scale of required investment means financing remains a challenge for many projects .
- Technology Leapfrogging: Many African nations are bypassing traditional carbon-intensive industrial pathways. They are directly adopting hydrogen-based direct reduction (H-DRI) and EAF technologies, avoiding the entrenched infrastructure associated with conventional blast furnaces .
🚧 Challenges and Constraints
Despite the promising momentum, the development of green steel in Africa faces several hurdles:
- Infrastructure and Financing Gaps: Inadequate transport networks and unreliable energy supply hinder operations. Furthermore, the high initial capital expenditure required for green hydrogen and DRI plants poses a significant barrier .
- Need for Skilled Workforce: The shift to advanced technologies like DRI and EAFs creates a demand for specialized technical skills that are currently in short supply across much of the continent .
- Competition from Imports: Local producers sometimes face competition from cheaper, often subsidized, imported steel, which can constrain the growth of domestic green steel industries .
🔮 Future Outlook and Conclusion
The future of green steel in Africa appears promising, driven by several converging trends. The full implementation of the African Continental Free Trade Area (AfCFTA) could create larger integrated markets, making large-scale green steel production more economically viable. Furthermore, global demand for low-carbon steel, particularly from Europe under CBAM, will continue to be a powerful market pull factor.
In conclusion, Africa’s green steel sector is rapidly evolving, with different countries adopting strategies tailored to their unique resources. Namibia leads in green hydrogen-based production, North African nations are leveraging geographic proximity to Europe, South Africa is utilizing its industrial base and scrap metal, and Angola is leveraging low-cost natural gas as a bridge. The success of these initiatives will hinge on continued strategic policies, international partnerships, and investments in infrastructure and skills. If these elements align, Africa has the potential to become a significant global hub for sustainable steel production.
