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Rio Tinto RIO has joined forces with BHP Group BHP and BlueScope to develop Australia’s largest ironmaking electric smelting furnace (ESF) pilot plant in Western Australia. The BHP-RIO alliance will work on processing iron sourced from Pilbara using an electric furnace replacing traditional blast furnaces.
This could lead the way in decarbonizing the steelmaking process, which is the need of the hour considering that steel production accounts for around 8% of the world’s carbon emissions.
Details of RIO & BHP’s Groundbreaking Project
RIO, BHP and Bluescope, Australia's largest steelmaker, formed the NeoSmelt collaboration in February. This combined BHP and Rio Tinto’s knowledge of Pilbara iron ore with BlueScope’s unique operating experience in ESF technology. BlueScope is the operator of the world’s only ESF processing direct reduced iron (DRI) in New Zealand.
Woodside Energy will also join as an equal equity participant and energy supplier, subject to the finalization of commercial arrangements.
The NeoSmelt pilot plant will test and optimize production of iron from the ESF. The ESF is capable of producing iron suitable for the basic oxygen steelmaking process. Iron ore is first converted to DRI before being charged into the ESF. The DRI-ESF equipment can replace the traditional blast furnace. This can help in reductions of up to 80% in CO2 emission intensity compared with the conventional blast furnace steel route.
The pilot plant would produce molten iron in the range of 30,000-40,000 tons a year. It will initially use natural gas to reduce iron ore to DRI. Once operational, the project aims to use lower-carbon emissions hydrogen for the process. The Western Australian Government will make A$75 million contribution to the project.
Subject to funding, the project expects to start feasibility studies in the second quarter of 2025. The final investment decision for the pilot plant is expected in 2026, with operations anticipated to start in 2028.
Efforts by RIO & Other Industry Players to Lower Emissions
Steelmaking is responsible for around 8% of the world’s carbon emissions. Most of these emissions are created during the industrial process of transforming the raw material, iron ore, into steel. Miners, through individual research and partnerships, are working on developing technologies and solutions to reduce the greenhouse gas (GHG) emission intensity of the steelmaking process.
Steelmaking accounted for 69% of Rio Tinto’s Scope 3 emissions in 2023. It has targeted reductions in Scope 1 and 2 carbon emissions of 15% by 2025 and 50% by 2030, relative to 2018 levels. The company expects to achieve net zero emissions from its operations by 2050.
