BlueScope, BHP, and Rio Tinto to Build Pilot Plant for Australia’s Largest Ironmaking Furnace

Australia’s biggest iron ore miners and its largest steelmaker are joining forces to build the country’s biggest electric smelting furnace (ESF) pilot plant in Kwinana, south of Perth. BlueScope, BHP and Rio Tinto are testing new technology that strips carbon emissions from the steelmaking process using Pilbara iron ore rather than conventional blast furnaces.

This year, BHP, Rio Tinto, and BlueScope formed NeoSmelt, combining expertise in Pilbara iron ore and electric smelting furnace technology. The project aims to use DRI-ESF technology to produce lower-carbon molten iron, reducing the carbon footprint of steel production. Woodside Energy will also join the project as an equal equity participant and energy supplier, pending final commercial arrangements.

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Pilot Plant Production and Decarbonization Goals

When operational, the pilot plant will churn out 30,000 to 40,000 tons of molten iron each year. It will use natural gas, to begin with, before a future switch to hydrogen. If successful, NeoSmelt could enable near-zero emissions steelmaking, ensuring Australia’s iron ore industry’s sustainability and meeting global demand.

The team chose the Kwinana Industrial Area for its strong logistics, infrastructure, and A$75 million support from the government. The plant's location will establish Western Australia as a leader in the global effort to reduce emissions in steel production.

Western Australian Premier Roger Cook said, "Under my WA Labor Government, our State is becoming a global renewable energy powerhouse – creating the jobs of the future and setting up our economy for the long term."

He added, "Putting the global steel industry on the pathway to near-zero emissions means more jobs in processing in WA, and a strong future for WA’s iron ore industry.”

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The NeoSmelt project is now moving into the next phase. Feasibility studies are expected to start in the second quarter of 2025. An FID will be taken by 2026, and the project is expected to start its operation by 2028. In addition, the project has been kept open for more partnerships with the same interests as those of the project.