An Australian consortium comprising BlueScope, BHP, and Rio Tinto has selected a location in the Kwinana Industrial Area, south of Perth, for the development of a pioneering electric smelting furnace pilot plant. The facility, named NeoSmelt, will serve as a testing ground for technology designed to produce iron from Pilbara iron ore without the need for traditional blast furnaces. This marks a significant step toward decarbonizing the steel industry by reducing reliance on conventional methods of iron production, which are known for their high carbon emissions.
The NeoSmelt pilot plant is expected to produce 30,000 to 40,000 metric tons of molten iron annually. Initially, it will utilize natural gas for the reduction of iron ore to direct reduced iron (DRI), a process that is already more efficient than traditional blast furnaces. However, the ultimate goal for the plant is to transition to using hydrogen as a reduction agent, a cleaner alternative that can help further minimize carbon emissions associated with iron production.
Tania Archibald, BlueScope’s Chief Executive for Australia, described the project as “unique and transformative” for the steel industry. She emphasized that the collaboration among the consortium members has been instrumental in advancing the project. “The progress made during the pre-feasibility stage is a testament to the collaboration of all parties involved,” said Archibald. BlueScope’s experience in steelmaking, particularly its operation of the world’s only electric smelting furnace that processes DRI in New Zealand, will play a key role in managing and executing the project.
The consortium’s decision to build the NeoSmelt plant in the Kwinana Industrial Area was driven by the location’s access to vital transport logistics and existing infrastructure. These factors are crucial to ensuring the smooth operation and scalability of the facility. Moreover, the project has received significant backing from the Western Australian government, which has pledged AUD$75 million in funding to help support the initiative.
Once the feasibility studies are completed, which are expected to begin in the second quarter of 2025, the consortium plans to make a final investment decision by 2026. If the project moves forward as planned, operations at the NeoSmelt plant could commence as early as 2028. The facility would not only help reduce carbon emissions in iron production but could also serve as a model for future advancements in sustainable steelmaking technologies.
The transition to hydrogen-based reduction in the NeoSmelt plant aligns with global trends in the industrial sector toward sustainability and reduced carbon footprints. Steel production, one of the highest-emitting industries worldwide, has long been under scrutiny for its environmental impact. Projects like NeoSmelt are crucial for demonstrating the feasibility of low-emission technologies in heavy industries.
If successful, NeoSmelt could have far-reaching implications, not only for the Australian steel industry but also for the global push toward greener manufacturing practices. The collaboration between three major players in the iron ore and steelmaking sectors shows a strong commitment to innovation and sustainability, potentially paving the way for similar initiatives in other regions aiming to meet climate targets and drive industry-wide transformation.