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BHP has signed a deal with one of the world’s largest steelmakers for a major decarbonisation collaboration.

Together, BHP and China’s HBIS Group will trial direct reduced iron (DRI) production aimed at lowering blast furnace carbon emissions.

The companies will use BHP iron ores in blends at HBIS’s newly commissioned DRI plant and then evaluate the performance of the DRI in downstream steelmaking steps.

The DRI plant uses hydrogen-rich gas by-products in the steelworks to convert ore into a metallic iron product that is further refined for steel.

“HBIS Group is a key partner to BHP and an industry leader in assessing and demonstrating a range of potential pathways to reduce GHG in steelmaking,” BHP chief executive officer Mike Henry said.

“Our work with customers like HBIS Group, together with our own actions, aims to accelerate progress in reducing greenhouse gas emissions right along the value chain.”

An enhanced lump second stage trial will commence focusing on the existing blast furnace steelmaking route.

This stage aims to reducing carbon emissions by increasing the use of direct-charge lump and reducing the need for agglomerated feed which requires fossil fuel energy.

As the latest collaboration agreement between BHP and HBIS, the project will tap into the investment of up to $US15 million over three years proposed by BHP and HBIS in an earlier memorandum of understanding signed in 2021.

“HBIS and BHP are aligned in their aims to help develop greener, low-carbon solutions that can reduce emissions in steelmaking, leveraging on our long-standing and trusted relationship that we have forged over several years,” HBIS chair Yu Yong said.

“The agreement signed today is another landmark following our substantive cooperation in areas such as CCUS, and highlights HBIS’s efforts to build a low-carbon raw material supply chain.”