Rio Tinto, BHP and BlueScope to collaborate on ‘green steel’ project

The Western Australian government has welcomed news of plans to utilise the state’s vast iron ore assets as part of investigations into the development of Australia’s first iron-making electric smelting furnace pilot plant – described as the “holy grail” of iron ore decarbonisation.

Under the “green steel” strategy, leading WA iron ore producers Rio Tinto (ASX: RIO) and BHP (ASX: BHP) will partner with steel manufacturer BlueScope (ASX: BSL) on steel decarbonisation, with the potential to commence pilot trials in 2027.

The unique partnership will help develop a new low-carbon steel smelting technology that will allow the wider use of WA ores in future “green” steelmaking plants.

The technology is designed specifically to use Pilbara iron ore as a feedstock, potentially providing a unique selling point for WA’s iron ore products in the future.

Use of an electric smelter is enhanced by using processed ores including pellets, beneficiated concentrates and direct reduced iron.

Further opportunities

The venture has identified further opportunities to reduce emissions across the steelmaking supply chain if plants can be located near renewable energy precincts.

Several precincts are currently being developed across regional WA where co-location of an electric steel furnace pilot plant would be possible.

Minerals Research Institute of Western Australia’s ‘Green Steel Opportunity’ report released in 2023 outlined a WA scenario for the supply of options for the production of low-emission steel.

A key recommendation of the study was to conduct a pre-feasibility study for a low-emissions iron plant to test the suitability of making iron for use in electric furnaces, including the development of an electric iron smelter, using WA iron ore.

The ‘holy grail’

Rio Tinto has described “green” steel as the ‘holy grail’ of the iron ore industry’s commitment to decarbonise.

It says addressing the broader carbon footprint of the commodities we produce will be one of the biggest challenges of the next decade.

This is especially the case when we consider the steel value chain.

Steel is currently responsible for 8% of global carbon dioxide and the company is setting aside around $305 million a year to invest in “green” steel development investments.

WA support

WA premier Roger Cook said the decarbonisation opportunities can help create long-term local jobs in a clean energy economy.

“WA is best positioned to support a low-carbon steel project, given our vast reserves of high-grade iron ore, mature and advanced iron ore industry, local technological know-how and significant renewable energy opportunities,” Premier Cook said.

“We look forward to engaging with Rio Tinto, BHP and BlueScope on how we can support this project.”