Australia is home to the world’s largest iron ore exporters, Rio Tinto and BHP Group. These mining giants have teamed up with the country’s biggest steelmaker, BlueScope Steel, to launch a pilot project that could revolutionize the steel industry and reduce its carbon footprint.
The project, announced on Friday, aims to build Australia’s first ironmaking electric smelting furnace (ESF) by 2027. The ESF would use green hydrogen instead of coal to convert iron ore into direct reduced iron (DRI), a form of iron that can be used to make high-grade steel.
The partners say that the DRI-ESF process could cut emissions by more than 80%, compared to the conventional blast furnace method that accounts for most of the world’s steel production. Steelmaking is one of the most carbon-intensive industries, contributing to about 8% of global emissions.
A global demand for green iron
The pilot project is not only a response to the growing pressure on the mining and steel sectors to decarbonize, but also a potential opportunity to tap into a new market for green iron.
According to the International Energy Agency, the global steel demand is expected to increase by 50% by 2050, driven by the need for infrastructure, construction, and the net-zero energy transition. However, the agency also warns that the current steelmaking technologies are incompatible with the Paris Agreement goals and calls for a rapid deployment of innovative solutions.
One of these solutions is green iron, which could help steelmakers around the world reduce their reliance on imported coal and lower their emissions. The project partners say that one of their ambitions is to produce commercial quantities of green iron that could be shipped to customers in Asia and beyond.
A first-of-its-kind collaboration
The project is also remarkable for being the first downstream collaboration between Rio Tinto and BHP Group, who are usually fierce competitors in the global iron ore market. The two companies have agreed to share the costs and risks of the project equally, along with BlueScope Steel.
The project will build on the previous work done by Rio Tinto and BlueScope Steel since October 2021 on using green hydrogen for the direct reduction of iron ore. The companies will assess several locations in Australia for the proposed pilot facility and expect to complete the pre-feasibility study by the end of the year.
BHP Group is also working on a similar electric smelting furnace pilot plant in Australia with the global engineering firm Hatch.
A hopeful future for green steel
The Green Iron project is one of the many initiatives that are underway to make the steel industry more sustainable and climate-friendly. In Europe, several steelmakers have already started to produce and sell green steel made with hydrogen or renewable electricity. In the US, the Biden administration has pledged to support the development of clean steel technologies as part of its infrastructure plan.
The Australian project, if successful, could position the country as a leader in green steel innovation and create new jobs and economic opportunities. It could also inspire more collaboration and investment in the sector, as well as more support from the government and the public.
As the world transitions to a low-carbon future, green iron could be the key to making steel a vital part of the solution.
Source: Reuters
