BlueScope, BHP & Rio Tinto select site for electric smelting furnace pilot plant

BlueScope, Australia’s largest steelmaker, and BHP and Rio Tinto, the country’s two largest iron ore miners, through the NeoSmelt collaboration, have selected the Kwinana Industrial Area, south of Perth in Western Australia, to develop the country’s largest ironmaking electric smelting furnace (ESF) pilot plant.

The project will test technology to enable the use of Pilbara iron ore to produce iron without the need for traditional blast furnaces and instead using direct reduced iron (DRI)-ESF technology to decarbonize steelmaking.

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The pilot plant would produce 30,000 to 40,000 metric tons of molten iron per year, initially using natural gas to reduce iron ore to DRI; but, once operational, the project aims to use lower-carbon emissions hydrogen to reduce iron ore.

The NeoSmelt parties assessed a number of pilot plant locations in Australia before selecting the Kwinana Industrial Area for its access to transport logistics and existing infrastructure, coupled with support from an AU$75 million ($46.9 million) contribution from the Western Australian Government.

Subject to funding, the project anticipates a decision to enter feasibility studies in the second quarter of 2025 and is targeting the final investment decision in 2026, with operations expected to begin in 2028.

BlueScope Chief Executive Australia Tania Archibald says the project is “unique and transformative,” adding, “The progress made during the pre-feasibility stage is a testament to the collaboration of all parties involved.”

She continues, “BlueScope’s role as project manager leverages our deep iron and steelmaking experience at the Port Kembla Steelworks and our unique capability as the operator of the world’s only electric smelting furnace processing DRI in New Zealand.”

BHP Western Australia Iron Ore (WAIO) Asset President Tim Day says, “We're thrilled to be well on our way to bringing this cutting-edge technology to life right here in Western Australia.

“A successful pilot plant of this scale would be a huge achievement as we work with our partners, here and around the world, to help fast-track near-zero emission pathways for steelmakers using Pilbara ores.”

“We must find better ways to produce the most commonly used metal in the world while meeting the needs of our planet and our climate objectives,” Rio Tinto Iron Ore Chief Executive Simon Trott says. “We are excited to announce the location for Australia’s largest ironmaking ESF pilot plant is in Western Australia. It’s just one of the ways we’re working with our peers to develop the technology needed to reduce the carbon intensity of iron and steelmaking.”

He adds, “The NeoSmelt pilot plant builds on the suite of projects Rio Tinto has underway with our customers and suppliers to find better ways to accelerate their efforts to meet their decarbonization targets.”

Woodside Energy also will join the consortium as an equal equity participant and energy supplier, subject to finalizing commercial arrangements, according to a news release from BlueScope.

Woodside Energy Executive Vice President and Chief Operating Officer Australia Liz Westcott says, “Woodside is excited that it will join the NeoSmelt project as an equal equity participant and energy supplier alongside BlueScope, BHP and Rio Tinto, subject to finalizing commercial arrangements.

“Natural gas and hydrogen may enable emissions reductions in steelmaking, and we are proud to bring to the NeoSmelt project our expertise, experience and know-how as a global supplier of energy,” she adds.

The NeoSmelt project remains open for collaboration with other parties that complement its objectives.