Major players are aiming to crack one of industry’s hardest problems — low-carbon steel.
A consortium of big industry names is advancing plans for Australia’s largest ironmaking electric smelting furnace (ESF) pilot plant, aimed at cutting emissions from steelmaking.
The project, named NeoSmelt, has received $19.8 million in funding from the Australian Renewable Energy Agency (ARENA) to support a front-end engineering design (FEED) study.
If successful, the plant will be located in the Kwinana Industrial Area in Western Australia, with a view toward large-scale deployment of low-carbon steelmaking technology using domestic iron ore.
The initiative is a joint venture involving BlueScope, BHP, Rio Tinto, and newly announced partners Woodside Energy and Mitsui Iron Ore Development.
The NeoSmelt project is exploring the direct reduced iron-electric smelting furnace (DRI-ESF) pathway, a lower-emissions alternative to conventional blast furnace steelmaking.
The DRI-ESF route combines hydrogen or natural gas-based direct reduction with electric smelting, aiming to convert Pilbara iron ore into molten iron with significantly reduced greenhouse gas emissions.
This approach could overcome longstanding metallurgical barriers associated with using Australian ore in decarbonised steelmaking processes.
“Globally, the steelmaking industry makes up around eight per cent of global greenhouse gas emissions, so the decarbonisation opportunity is huge,” said ARENA CEO Darren Miller.
“The NeoSmelt project brings together some of the world’s largest players in the mining, metals and energy industries, in a collaborative effort to reduce emissions in the sector.”
“As the world’s largest producer of iron ore, Australia has an important role to play in reducing emissions across the steel value chain. We’re excited by the insights this project expects to provide.”
“Today marks a significant step forward in developing a technology for lower-carbon emissions steelmaking using Pilbara ore and we’re delighted by ARENA’s $19.8 million commitment to support the feasibility phase of this groundbreaking R&D pilot plant,” said BlueScope Chief Executive Australia, Tania Archibald.
“With this backing from government and industry leaders, we now have the opportunity to develop world leading technology that will have potential application across the global steel industry and provides the foundation for a future Australian lower-carbon emissions iron export industry.”
The NeoSmelt study is funded under ARENA’s Industrial Transformation Stream, with Round 2 of the program currently open for applications until 15 July 2025.