The largest iron ore producers and leading steel manufacturer in Australia have joined forces to accelerate the decarbonisation of steel production. They have committed to exploring the development of Australia's first ironmaking electric smelting furnace (ESF) pilot plant.

With a recently established framework agreement, Rio Tinto, BHP, and BlueScope will integrate the progress achieved by each entity thus far. This collaboration will harness the extensive expertise of both BHP and Rio Tinto in Pilbara iron ores, coupled with BlueScope's distinctive operational proficiency in ESF technology.

The collaboration aims to develop and invest in a pilot facility, demonstrating the feasibility of producing molten iron from Pilbara ores using renewable power and Direct Reduced Iron (DRI) technology. Success could lead to near-zero greenhouse gas emissions in steelmaking operations relying on Australian iron ore to meet global demand.

The parties will assess various Australian locations based on factors like infrastructure and workforce availability for the proposed pilot facility. The pre-feasibility study is expected to conclude by year-end, and if approved, the facility could be commissioned by 2027.

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.”

Incoming BHP Western Australia Iron Ore (WAIO) Asset President, Tim Day said: “Combining our expertise, we hope to help fast track near-zero emission-intensity pathways for steelmakers using Pilbara ores. Technology pathways compatible with renewable energy and scalable to the order of hundreds of millions of tonnes of steel production would be a major step forward in setting up Pilbara ores, and the world, for a low greenhouse gas emission future.”

BlueScope Chief Executive Australia, Tania Archibald said: “We believe DRI is the most prospective technology to decarbonise our Australian business, and the development of ESF technology is key to unlocking Australia’s unique advantages in this decarbonisation journey – and, more importantly, has the potential for wider adaptation across the global steel industry. We believe that this collaboration where we can contribute BlueScope’s unique experience in operating an ESF will be key to cracking the code for Pilbara ores in low emission-intensity ironmaking.”

About the Pilot Electric Smelting Facility: Via BlueScope

A pilot facility would be intended to test and optimise production of iron from the ESF, a type of furnace being developed by leading steel producers and technology companies targeting low CO2 emission-intensity steel.

The ESF is capable of producing iron suitable for the basic oxygen steelmaking (BOS) process. Iron ore is first converted to direct reduced iron (DRI) before being charged into the ESF. Together, the DRI-ESF equipment can replace the blast furnace, eliminating the need for metallurgical coal.

Estimates show that reductions of more than 80 per cent in CO2 emission intensity are potentially achievable processing Pilbara iron ores through a DRI-ESF pathway, compared with the current industry average for the conventional blast furnace steel route.

Other lower CO2 emission-intensity production routes, such as electric arc furnaces, require scrap steel and DRI produced from high grade iron ores.

The ESF allows for greater flexibility in input raw materials, addressing one of the key barriers to wider adoption of low carbon emissions technology. The ESF also has the potential to be integrated into a steel plant’s existing downstream production units.