Rio Tinto, BHP and BlueScope Steel announced in February that they are working together on technology to make lower-grade Pilbara iron ore suitable for direct reduced iron (DRI) processes that don’t include the use of metallurgical coal.
Australia’s two largest iron ore producers and its biggest steelmaker are planning to jointly investigate the development of country’s first ironmaking electric smelting furnace (ESF) pilot plant.
Under a recently signed framework agreement, Rio Tinto, BHP and BlueScope Steel will consolidate the work each party has completed to date, leveraging BHP’s and Rio Tinto’s knowledge of Pilbara iron ores with BlueScope’s operating experience in ESF technology.
The collaboration, according to the companies involved, 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, the partners believe that 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 that 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 Chief Executive Australia, Tania Archibald said: ““We believe DRI is the most prospective technology to decarbonize our Australian business, and the development of ESF technology is key to unlocking Australia’s unique advantages in this decarbonization journey – and, more importantly, has the potential for wider adaptation across the global steel industry. We believe that this collaboration where we can contribute BlueScope’s unique experience in operating an ESF will be key to cracking the code for Pilbara ores in low emission-intensity ironmaking.”
According to the Institute for Energy Economics and Financial Analysis – a Colorado-based energy market research firm – the agreement comes at a time when governments in other parts of the world are providing larger sums for the transition to DRI-based steelmaking to set up their industries for the future. For example:
• In Germany, Thyssenkrupp is receiving about €2 billion to shift from blast furnaces to DRI and green hydrogen.
• France will provide up to €850 million in government subsidies to help Arcelor-Mittal switch to DRI.
• Canadian government agencies provided C$900 million for ArcelorMittal to transition to DRI in Ontario.
