Hazer Group (ASX: HZR) has entered a binding memorandum of understanding with M Resources to supply low-cost clean hydrogen and graphite technology for the proposed acquisition of the Whyalla steelworks in South Australia.
The partnership positions Hazer's proprietary methane pyrolysis technology as an exclusive decarbonisation solution for M Resources' bid to acquire One Steel Manufacturing, the owner of the Whyalla steelworks currently being offered for sale by administrator KordaMentha through 333 Capital.
The agreement targets development of an integrated large-scale commercial Hazer facility delivering globally competitive low-cost hydrogen for steel production while aligning with state and federal government plans to transform Whyalla into a clean steelmaking hub.
Targeting Direct Reduction Process
Hazer’s technology will supply clean hydrogen to replace natural gas in the Direct Reduction Process (DRP), where hydrogen reduces iron ore pellets to metallic iron while producing only water vapour.
Hazer graphite will serve as a recarburiser in the Electric Arc Furnace (EAF) stage of steel production, with the planned facility targeting large-scale commercial hydrogen production capacity and additional synergies from using iron ore as a catalyst.
The dual-output capability delivers both critical inputs for hydrogen-DRP and EAF steelmaking in one efficient, low-emission process.
Hazer will leverage its strategic alliance with KBR to materially strengthen the Whyalla clean-steel proposal with its global engineering capability and long-standing local presence, which was recently strengthened by its selection as concept design partner for the new nuclear-submarine construction yard under the AUKUS partnership.
The parties have agreed to explore deployment of Hazer technology for low carbon emissions direct reduced iron (DRI) production in other jurisdictions, particularly the Middle East and the United States.
Hydrogen Growth Supports Steel Pivot
By 2060, the iron and steel industry will represent the largest increase of hydrogen demand in the manufacturing sector, with 80% forecast for low emissions steel using the DRI process.
This represents growth of over 10 times in the next 35 years, according to DNV Energy’s Transition Outlook 2025.
Hydrogen is increasingly viewed as a replacement for natural gas or coal as the reductant in DRP, converting iron ore pellets to metallic iron while dramatically cutting Scope 1 emissions.
Hazer’s technology simultaneously converts methane emissions or gas into low-cost clean hydrogen and premium synthetic graphite, which plays an important role in EAF operations as a carburiser in low carbon emissions steel production.
Natural Fit for Clean Industry Goals
Chief executive officer Glenn Corrie said the partnership demonstrates Hazer's ability to integrate its technology into steelmaking through low-cost clean hydrogen for direct iron reduction and graphite application in electric arc furnaces.
"The opportunity to apply Hazer's technology in conjunction with KBR at Whyalla is particularly compelling," Mr Corrie said.
"In my recent engagements in Canberra, steelmaking was consistently recognised by key ministries as a natural fit for Hazer's technology and Australia's broader clean-industry ambitions."
M Resources chief executive officer Matt Latimore said the world-class methane pyrolysis technology further strengthens the bid by dramatically lowering the cost of low carbon emissions steel production.
Agreement Provides Mutual Exclusivity
The MoU provides mutual exclusivity for the Whyalla steelworks bid process, ending if M Resources' bid is unsuccessful.
Hazer retains all intellectual property rights to its technology under the agreement.
The parties will collaborate on government financial support for Hazer at Whyalla and assess utilisation of Hazer graphite as a recarburiser, with each to bear its own costs associated with the agreement.
The Whyalla steelworks is a long-standing pillar of Australia's iron ore and steel industry, with M Resources' proposal prioritising economically viable long-term industrial renewal with strong emphasis on carbon abatement.
