BHP and Rio Tinto have announced plans to jointly develop a pilot plant aimed at producing low-carbon iron from Pilbara ores in Western Australia, marking a significant step in decarbonizing the global steel industry. The announcement, made in a joint statement on Tuesday, highlights the companies’ commitment to advancing sustainable practices in steel production.
Project Details and Technology
The new facility, located in the Kwinana industrial hub of Western Australia, will incorporate renewable energy and use Direct Reduced Iron (DRI) technology in an Electric Smelting Furnace (ESF) to produce molten iron. The pilot plant is expected to have an annual output of 30,000 to 40,000 tonnes of iron. If successful, this approach could lead to near-zero greenhouse gas emissions in iron and steel production, positioning Australian iron ore as a key resource for decarbonizing global steelmaking.
This project is critical as the steel industry is responsible for approximately 8% of global carbon emissions, largely due to the conventional methods used in iron ore smelting.
Collaboration with BlueScope and Woodside
The pilot project, which was initially announced in February as part of a broader effort to reduce emissions in the steel sector, will now proceed with finalised details including the location and output forecasts. The facility will be developed in collaboration with BlueScope Steel, a leader in the steelmaking industry.
Woodside Energy, a major energy provider, will also join the project as an equal equity participant and energy supplier, subject to final commercial agreements. This partnership, named NeoSmelt, is designed to leverage advanced technologies and renewable energy to significantly reduce emissions from steel production.
Timeline and Future Plans
The pilot plant is set to enter its feasibility study phase in Q2 2025, with a final investment decision expected by 2026. If the project proceeds as planned, operations are anticipated to begin by 2028. The companies are optimistic that the success of this initiative could pave the way for a broader shift toward sustainable steel production globally.
This collaborative effort aims to meet the growing demand for steel while contributing to global decarbonization goals, especially in industries like infrastructure and the net-zero energy transition, where steel is a key material.