Posted on 19 Jun 2025
NeoSmelt, a joint venture formed last year and managed by BlueScope, Australia's largest steelmaker, has received A$19.8-million ($12.9 million) funding from the Australia government's Australian Renewable Energy Agency (ARENA) to support its plans to develop an electric smelting furnace (ESF) pilot plant in Western Australia that aims to produce lower-carbon emissions molten iron from WA iron ore, Mysteel Global learns.
The NeoSmelt pilot plant, planned to be built at the Kwinana Industrial Area, south of Perth, aims to prove that Pilbara iron ore can be used to produce lower-carbon emissions molten iron using the DRI-ESF technology, where iron ore is first converted to direct reduced iron (DRI) before being charged into an ESF, according to a June 17 statement from Rio Tinto, one of the founding members of the consortium, together with fellow iron ore miner BHP and BlueScope.
Rio Tinto claims that the "new DRI-ESF pathway" could reduce the CO2 emission intensity by up to 80% compared with the conventional blast-furnace route. "If successful, this has the potential to unlock longer term alternatives to the traditional blast furnace steelmaking route and help ensure the longevity of Australia's iron ore industry," the miner said.
The ARENA funding will be used for a feasibility study into a NeoSmelt pilot plant that if approved, would produce 30,000-40,000 tonnes/year of molten iron from 2028, according to the news release.
Tuesday's statement also said that Australian energy producer Woodside Energy and Mitsui Iron Ore Development, a wholly owned subsidiary of Japanese trader Mitsui & Co, were joining the NeoSmelt consortium, with each of the five companies holding an equal stake in the venture.
With Woodside as the preferred energy supplier, the plant will initially use natural gas to reduce iron ore to DRI, but once operational, it will switch to lower-carbon emissions hydrogen to reduce iron ore, Rio Tinto added.
Mitsui Iron Ore Development, a conduit through which much Australian iron ore supplies Japan's largest steelmaker, Nippon Steel, has been close to Rio Tinto for decades. It owns 33% of the Robe River Joint Venture in the Pilbara -- with Rio Tinto holding 53% and Nippon Steel Australia 14% – that began operations in 1972. Robe River produces about 65 million t/y of ore for export to mainly to Asia.
Source:Mysteel Global
