Billions for Hydrogen Steel: thyssenkrupp Needs the Raw Materials – Strategic Resources and Rio Tinto Aim to Supply Them

thyssenkrupp – Between green steel and painful restructuring

The steel division is driving the hydrogen transition, but the road ahead is rocky. The direct reduction plant in Duisburg is scheduled to start up in 2027, initially using natural gas and later green hydrogen. Until then, "bluemint® Steel" will serve as a bridge technology, reducing CO₂ emissions by up to 70%. The problem is that full decarbonization depends on hydrogen infrastructure and political support. CEO López warns that the model will not be profitable without stable energy prices. Sales talks with Jindal are on hold; for now, the group is tackling the multi-billion-euro restructuring on its own.

The second quarter surprised with a jump in operating profit. Adjusted EBIT rose to EUR 198 million, with order intake surging thanks to major naval contracts. However, the bottom line shows a loss of EUR 11 million. The reason lies in the EUR 401 million in provisions for job cuts in the steel division. There, 11,000 jobs are set to be eliminated. CFO Hamann confirms the annual EBIT forecast but slightly revises the revenue expectation downward. The operational turnaround has begun, but the tough restructuring continues to weigh on the balance sheet.

The group is transforming itself into a financial holding company. The marine division TKMS shines with a record order backlog of EUR 20.6 billion and serves as a model. Next up is Materials Services, which is under review; both an IPO and a sale are possible. The hydrogen subsidiary nucera is securing orders but is struggling with operational losses. The steel division remains the toughest nut to crack, but the paused sale talks show that management is betting on value creation through restructuring. The next quarterly reports will prove whether this bet pays off. The stock is currently trading at around EUR 10.315.

Strategic Resources – The secret beneficiary of the steel transition

The global steel industry is switching to electric arc furnaces. These are cleaner but hungry for specialized feedstock. This is exactly where Strategic Resources comes in. The Canadian company is developing a pelletizing plant for high-purity iron ore in the deep-water port of Port Saguenay, fully approved and with a direct connection to the Trans-Canada gas pipeline. Electricity costs in Quebec? Just CAD 0.04 per kilowatt-hour from hydroelectric power. That is a structural cost advantage that old heavy-oil plants simply cannot match. The company recently listed on the Frankfurt Stock Exchange to attract European capital for its next phase of growth.

The financing process is now running at full speed. Strategic is currently raising up to CAD 10 million through a combined offering of LIFE financing and a private placement. Each unit, priced at CAD 0.25, consists of one share and one full warrant, which entitles the holder to purchase shares at CAD 0.40 per share for a period of three years. In parallel, the company has entered into a letter of intent with Tyfast Energy. Together, they plan to refine Canadian vanadium from their own mine into battery material for heavy-duty vehicles—a smart move to extend the value chain.

What rounds out the package for investors is the BlackRock project, which is no longer a blank slate. The permits have been approved, major shareholders and the Province of Quebec are set to participate in the financing, and a ten-year off-take agreement with Javelin Global Commodities secures sales. Operating costs for pellet production are estimated at just over CAD 16 per ton. At current prices around CAD 54, the margins are more than respectable. Vanadium and titanium are also produced as byproducts. The groundwork has been laid; now it is time for implementation. The stock is currently trading at CAD 0.25.

Rio Tinto - Between the Ore Boom and Social Risks

Rio Tinto supplies the global steel industry with the crucial raw material: high-quality iron ore from the Pilbara mines in Australia and the Simandou megaproject in Guinea. Chinese conglomerates such as Baowu are among its key customers. The company is increasingly focusing on ores suitable for hydrogen-based direct reduction processes. This is a smart move given the decarbonization of steel production. Anyone making steel today needs high-quality ore, and Rio Tinto delivers exactly that. In doing so, the company is securing a key role in the industry's future, lower-carbon value chain.

The first-quarter 2026 operating results were solid. Copper-equivalent production increased by 9%. The Pilbara mines recorded their second-best Q1 output since 2018, despite two cyclones that cost the company approximately 8 million tons in shipments. The company aims to offset about half of that loss over the course of the year. Oyu Tolgoi in Mongolia increased copper production by 21% compared to the previous quarter. The annual forecasts for iron ore, copper, aluminum, and lithium remain unchanged. Rio Tinto is delivering operationally, even if not everything is running smoothly.

But social and environmental issues are growing alongside the business. Three fatalities on company premises are weighing on the group's safety record. In Western Australia, conflicts with Indigenous communities over water extraction and sacred sites are escalating, bringing back bitter memories of the Juukan Gorge scandal. In Madagascar, too, promises regarding local development remain unfulfilled after 15 years. And regarding the indirect emissions of its steel customers (Scope 3), Rio Tinto refuses to set clear reduction targets. Anyone investing here is buying operational strength, but also tangible reputational risks. Currently, a share costs EUR 91.75.

The hydrogen transition in the steel industry remains an illusion without the right raw materials. thyssenkrupp is tackling the billion-euro-scale conversion of its Duisburg direct reduction plant, but is struggling with job cuts and uncertain funding. Strategic Resources is securing a profitable niche as a supplier through its pelletizing plant in Quebec, thanks to low hydropower costs and firm off-take agreements. Rio Tinto supplies the in-demand high-quality ore for green processes, but must factor in social conflicts and a lack of Scope 3 targets as risks.