Australian companies join forces to chase green steel dream

If it doesn't work at first, try a new technique. That's the approach being taken by a consortium of four Australian companies to achieve the elusive goal of producing “green” steel.

Two iron ore miners, BHP Billiton and Rio Tinto, have teamed up with gas producer Woodside Energy and steelmaker BlueScope to study building an arc steel plant powered by renewable electricity.

If successful, the NeoSmelt project would create a new market for Australian iron ore, which is currently sold mainly in unprocessed form before being shipped to steel mills in Asia.

Because the finished product produced at the NeoSmelt factory, planned for construction near the Australian west coast city of Perth, will theoretically have a low carbon content, it will be marketed as “green” or less environmentally polluting than traditional steel produced using coal.

The challenge for the players, which have strong backing from the Western Australian government, is to succeed where past steel processing schemes have failed.

A conventional blast furnace operated by BHP close to the NeoSmelt project site was abandoned in the 1980s because the pig iron it produced – an early stage in the steelmaking process – could no longer compete with other Australian blast furnaces and required imported material.

The next attempt at “value-added” processing of raw iron ore is a radical technology developed by Rio Tinto called Hismelt. It also failed.

BHP next tried to add value to its iron ore using a new technology called hot briquetted iron (HBI), but that plan also failed after an explosion at a plant it was building near Port Hedland on the northwest coast.

Neosmelt appears to be a variation on the value-added theme, except that this time it will use renewable electricity generated by solar farms and wind turbines.

The Western Australian Government is supporting Neosmelt through a $75 million investment in project infrastructure.

Partners in the project said in a statement that the technology to be tested at the NeoSmelt pilot plant represents one of the most promising pathways to decarbonizing Australian iron ore processing – putting the world on a path to producing near-zero emission steel. .

Studies for the project are expected to be completed by March next year, with a final investment decision due in 2026 and the plant likely to be operational in 2028.

Zero emission fast track

Tim Dey, president of BHP's iron ore assets, said the success of the pilot plant would be a huge achievement as the consortium works to fast-track a path to near-zero emissions for steelmakers using Australian iron ore.

Rio Tinto iron ore chief executive Simon Trott said it was important to find a better way to produce the world's most commonly used metal while meeting climate targets.

Liz Westcott, Woodside Executive Vice President and Chief Operating Officer Natural gas and hydrogen may help reduce emissions from the steelmaking process.