News: BHP Rio Tinto, BHP tie up in Australian steel decarbonisation pilot

Rival miners Rio Tinto RIO.L (RIO) and BHP Group (BHP) said on Friday they would jointly investigate the development of a pilot project to decarbonise steelmaking that could be commissioned as early as 2027.

Australia's two largest iron ore producers and its biggest steelmaker BlueScope Steel (BSL) said in a joint statement the collaboration would look to develop and "potentially invest" in the country's first ironmaking electric smelting furnace (ESF) pilot plant.

If successful, it could help open a potential pathway to near-zero greenhouse gas emission-intensity operations for steelmakers that rely on Australian iron ore to meet global steel demand, the statement said.

The production of steel, a key material for infrastructure and the net-zero energy transition, currently contributes around 8% of global carbon emissions.

"The carbon intensity of iron and steelmaking requires profound change to meet the needs of our planet and our climate objectives," said Rio Tinto Iron Ore Chief Executive Simon Trott.

The announcement was made at BlueScope's Port Kembla steelmaking operations 75 kilometres (46.6 miles) south of Sydney.

Under a new framework agreement, Rio, BHP and BlueScope will consolidate the work each party has completed to date, it said.

The companies said they would assess several locations in Australia, the world's top exporter of iron ore, for the proposed pilot facility.

The pre-feasibility study work programme is expected to conclude at year-end. If approved, the pilot facility could be commissioned as early as 2027, they said.

If successful, this would be the first partnership between the two global miners on a downstream project.

"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,” Tim Day, BHP's incoming Western Australia iron ore asset president, said in the statement.

The 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 carbon emission-intensity steel.

Rio and BlueScope had announced in October 2021 they would work together to explore low-carbon steelmaking pathways using iron ores from Western Australia's Pilbara region, including the use of clean hydrogen to replace coking coal at BlueScope’s Port Kembla steelworks.