Australia’s two largest iron ore producers and the country’s biggest steelmaker have partnered to accelerate the decarbonisation of steelmaking by agreeing to jointly investigate the development of the country’s first ironmaking electric smelting furnace (ESF) pilot plant.
Under a new framework agreement, Rio Tinto Ltd (ASX:RIO) (LSE:RIO, ASX:RIO, OTC:RTNTF), BHP (ASX:BHP) Group Ltd (LSE:BHP, ASX:BHP) and BlueScope Steel (ASX:BSL) will consolidate the work each party has completed to date, leveraging both BHP’s and Rio Tinto’s deep knowledge of Pilbara iron ores with BlueScope’s unique operating experience in ESF technology.
The collaboration will look to develop and potentially invest in a pilot facility and aims to demonstrate that production of molten iron from Pilbara ores is feasible using renewable power when combined with Direct Reduced Iron (DRI) process technology. If successful, it could help open a potential pathway to near-zero greenhouse gas emission-intensity operations for steelmakers that rely on Australian iron ore to meet global steel demand.
The parties will evaluate multiple sites across Australia for the planned pilot facility, taking into account factors such as infrastructure support, workforce availability, accessibility to target industries and supply chain partners, and suitability for operational trials. The pre-feasibility study is anticipated to conclude by year-end. If approved, the pilot facility could be commissioned as early as 2027.
Accelerating efforts to meet decarbonisation targets
Rio Tinto Iron Ore chief executive Simon Trott said: “The carbon intensity of iron and steelmaking requires profound change to meet the needs of our planet and our climate objectives. We must find better ways to enable these materials to be made more sustainably through leveraging technology.”
“We firmly believe the best way to tackle a challenge of this scale is through collaboration with industry and importantly this new agreement will leverage the more than two years of work we have already completed with BlueScope on this technology.
“This partnership will benefit from Rio Tinto’s and BHP’s unrivalled experience of Pilbara ores as well as the technical steelmaking capability and unique operating knowledge of BlueScope.
“We are excited to add this partnership to the suite of projects we have underway with our customers and suppliers to find better ways to accelerate their efforts to meet their decarbonisation targets.”