Australia's green metals gambit: the technologies to decarbonise steel

A switch to green iron, powered by renewables, could grow Australia’s iron ore export earnings from $116 billion in 2024–25 to around $386 billion a year by 2060, according to projections from the Superpower Institute headed by economist Ross Garnaut. Australia is already by far the world’s biggest exporter of iron ore, supplying just under 55% of global market share in 2024 (nearly all of it is from the Pilbara region in WA) and the world’s largest alumina exporter. Australia faces a significant obstacle however, if it is to transform the world’s largest iron deposits into fossil-free metals, according to news from the CSIRO.

With iron and steel production alone responsible for a massive 6–8% of global carbon dioxide emissions, and aluminium a further 2%, there’s global demand for decarbonisation of metal production, and this is where the problem lies.

“Making metals is an energy-intensive business,” said Keith Vining, CSIRO Group Leader for Green Metals Production. “Pilbara iron ores are challenging materials in existing low carbon iron-making processes.”

The problem lies in impurities (mostly silica and alumina) which push the ratio of iron content down and raise the ratio of waste rock and minerals, known as ‘gangue’. These impurities are tightly bound to iron oxide in the rock and need to be removed via high-temperature processing.

Traditional blast furnaces use coal to remove oxygen and associated impurities from iron ore in the steelmaking process, while the newer direct reduction (DRI) process uses gas or hydrogen as a reducing agent instead of coal. But DRI typically requires ores with an iron content over 67% which excludes Australia’s lower-grade Pilbara ore. With 55–62% iron, Pilbara ore is not pure enough for current low-carbon and carbon-free technologies.

Working on a solution

Instead of waiting decades for new technologies to emerge, CSIRO is currently testing adaptations of existing DRI technology that can work with Pilbara ore.

“We want to use existing technologies because the pathway for brand new technologies is so much longer,” Vining said.

CSIRO researchers are part of a cross-industry project testing whether the current narrow specifications around the operating envelope for DRI can be expanded and whether, by accepting some productivity loss, Australian iron ore could be viable for these new processes.

Value-add opportunity

The potential economic benefits are enormous. Australia’s steelmaking capacity is relatively small and limited with just two major steelworks at Whyalla and Port Kembla using primary ore. The economic opportunity lies in processing iron ores.

The Superpower Institute’s $386 billion annual revenue projection is based on ramping up green iron production gradually between now and 2060. Transforming our metals production away from fossil fuels would shift Australia from ore exporter to value-added producer, embedding renewable energy into what the nation ships overseas.

“Is it doable? Theoretically, yes, absolutely,” Vining said. “Those numbers are not based on everything suddenly getting made into a green iron product. The production ramps up over that period of time, so they’re pragmatic sort of numbers; but we need a lot of other things to come together, for us to pull it off.”

Infrastructure gap

The biggest barrier to achieving that $386 billion opportunity, Vining said, is that it requires a massive investment in infrastructure, including the development of an industrial-scale renewables grid to service metals processing works.

“We’re going to need a renewable energy network at a scale that simply does not exist at the moment,” he said.

Beyond the renewable energy network itself, Australia faces the challenge of building processing plants in an area with some of the world’s highest capital costs. The Pilbara region is remote and its ports are configured for outgoing shipments, not incoming materials and equipment.

“Most things have to go into Fremantle, and get trucked to the Pilbara,” Vining said.

That’s a journey of more than 1300 kilometres by road, and all of the labour will need to fly in and fly out.

Energy costs must also come down to competitive levels. Producing hydrogen from renewable energy is currently too expensive to compete with Chinese blast furnaces, even before factoring in labour and capital costs.

Bridge technology

Near-term projects are already moving forward using reformed natural gas (methane) as a bridge fuel. At 700–1000°C, gas reforming uses steam to convert methane into hydrogen and carbon monoxide.

“Using that process is actually 50% less CO₂-intensive than using solid carbon in a blast furnace,” Vining said.

BHP, in a partnership with Korean steelmaker POSCO, has announced plans for a hydrogen-ready DRI demonstration plant adjacent to POSCO’s steelworks in Korea established to process Pilbara ores without these first going through a pelletising process.

Another joint venture, NEOSMELT — led by BlueScope, in partnership with Rio Tinto, BHP, Mitsui and Woodside Energy, and supported by the Australian Renewable Energy Agency — will build an electric smelting demonstration facility in Kwinana, south of Fremantle in Western Australia. The project involves feeding direct reduced iron into an electric smelting furnace, with plans to operate for three years to test the technology at scale.

The projects making Australian ore work

A key focus for CSIRO is adapting Pilbara ore for these new processes, with research spanning the full production chain, from grinding to pelletising to electric smelting.

CSIRO’s three-year India-Australia Green Steel Partnership supports five different projects to reduce emissions and address the challenge of processing low-grade iron ores without fossil fuels. Under this program, researchers have developed what Vining describes as “a very promising method for making the pellets that will go into the shaft furnace”.

On the pre-processing front, CSIRO is working both sides of the energy-intensive grinding circuit that breaks ore down into fine particles suitable for processing. In the first stage of the process, researchers are finding ways to selectively remove more of the unwanted material like silica and alumina, so less ore goes through the energy-intensive grinding step. After grinding, they’re improving classification systems to avoid recycling fine material back through the circuit.

The key technology in that classification stage is the hydrocyclone, which uses water and centrifugal force to sort particles at industrial scale.

“The challenge is trying to get the accuracy of a sieve with the throughput of a hydro-cyclone,” Vining said.

CSIRO is also building end-to-end pilot-scale capability, from pelletising to gas-based DRI to electric smelting, to simulate the complete process with Australian ores. The pilot is in the early stages with industry and university partners being established, and will couple an electric smelting furnace with existing pelletising equipment.

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