Some of the industry’s biggest players are teaming up to investigate the development of the country’s largest ironmaking electric smelting furnace pilot plant, with the Australian Renewable Energy Agency (ARENA) allocating $19.8 million to the NeoSmelt project.
The joint venture – located in Kwinana, Western Australia – will combine the expertise of BlueScope, BHP, Rio Tinto, Woodside and Mitsui Iron Ore Development.
The funding from ARENA will go towards a front-end engineering design (FEED) study for the NeoSmelt project to progress the direct reduced iron-electric smelting furnace (DRI-ESF) route for lower-emissions steelmaking.
ARENA said the DRI-ESF route is a transformative concept with the potential to overcome barriers using Australian iron ore in future lower-emissions steelmaking.
Using the electric smelting furnace technology, the project aims to prove that it is possible to produce lower-carbon emission molten iron from Pilbara iron ore.
ARENA CEO, Darren Miller, said to decarbonise mining and metal production in Australia, collaboration and partnership across industry is crucial.
“Globally, the steelmaking industry makes up around eight per cent of global greenhouse gas emissions, so the decarbonisation opportunity is huge,” he said.
“The NeoSmelt project brings together some of the world’s largest players in the mining, metals and energy industries, in a collaborative effort to reduce emissions in the sector. This represents what the energy transition is all about – working together to achieve the most efficient and effective outcome for Australia’s key export industry to transition into a lower-emissions economy.”
Mr Miller said as the world’s largest producer of iron ore, Australia has an important role to play in reducing emissions across the steel value chain.
“We’re excited by the insights this project expects to provide. This is a positive step towards building a lower-emissions steel industry here in Australia.”
In late 2024, the Kwinana Industrial Area, south of Perth, was announced as the preferred location to develop the first of a kind pilot plant.
The FEED study, which will be supported by funding from ARENA, is expected to help inform a final investment decision for the pilot plant to be built.
On behalf of the joint venture, BlueScope Chief Executive Australia, Tania Archibald, said the announcement marks a significant step forward in developing a technology for lower-carbon emissions steelmaking using Pilbara ore.
“We’re delighted by ARENA’s $19.8 million commitment to support the feasibility phase of this groundbreaking R&D pilot plant,” she said.
“We also officially welcome Woodside Energy and Mitsui Iron Ore Development to the NeoSmelt joint venture, joining founding participants BlueScope, BHP and Rio Tinto.
“With this backing from government and industry leaders, we now have the opportunity to develop world leading technology that will have potential application across the global steel industry and provides the foundation for a future Australian lower-carbon emissions iron export industry.”
The project builds on ARENA’s priority in low emissions metals and is being delivered under the Industrial Transformation Stream. Round two of the program is currently open to new applications and is expected to close 15 July 2025.
For more information, including program guidelines, eligibility criteria and how to apply, visit the funding page.
