Australia’s two largest iron ore producers and its biggest steelmaker have partnered in their efforts to accelerate the decarbonization of steelmaking by agreeing to investigate jointly the development of the country’s first ironmaking Electric Smelting Furnace (ESF) pilot plant.
Under a new framework agreement, Rio Tinto, BHP and BlueScope will consolidate the work each party has completed to date, leveraging both BHP’s and Rio Tinto’s deep knowledge of Pilbara iron ores with BlueScope’s unique operating experience in ESF technology.
The collaboration provides a platform to develop and potentially invest in a pilot facility and aims to demonstrate that production of molten iron from Pilbara ores is feasible using renewable power when combined with Direct Reduced Iron (DRI) process technology. 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 parties will assess several locations in Australia for the proposed pilot facility, and will consider factors like supporting infrastructure, available workforce, access to target industry and supply chain partners, and suitability for operational trials. The pre-feasibility study work program is expected to conclude at year-end. If approved, the pilot facility could be commissioned as early as 2027.
A pilot facility would be intended to test and optimize production of iron from the ESF, a type of furnace being developed by leading steel producers and technology companies targeting low CO2 emission-intensity steel. The ESF is capable of producing iron suitable for the basic oxygen steelmaking (BOS) process.
Iron ore is first converted to direct reduced iron (DRI) before being charged into the ESF. Together, the DRI-ESF equipment can replace the blast furnace, eliminating the need for metallurgical coal. Estimates show that reductions of more than 80% in CO2 emission intensity are potentially achievable processing Pilbara iron ores through a DRI-ESF pathway, compared with the current industry average for the conventional blast furnace steel route.
Other lower CO2 emission-intensity production routes, such as electric arc furnaces, require scrap steel and DRI produced from high grade iron ores. The ESF allows for greater flexibility in input raw materials, addressing one of the key barriers to wider adoption of low carbon emissions technology. The ESF also has the potential to be integrated into a steel plant’s existing downstream production units.
BlueScope Steel Limited was spun-off from BHP Billiton in 2002.