BHP and China Baowu Steel have renewed their steel decarbonisation partnership for another five years, with trials of Pilbara iron ore in modified blast furnaces and emerging steelmaking technologies at the centre of the agreement.
The new memorandum of understanding builds on work the companies began in 2020, and sets out two priorities – reducing emissions from existing blast furnace operations, and testing whether BHP’s ores can be used more widely in hydrogen-based direct reduced iron (DRI) and electric smelting furnace (ESF) processes.
Under the blast furnace work, the partners aim to demonstrate carbon dioxide emissions intensity at least 30 per cent below conventional operations.
BHP said reductions could potentially exceed 80 per cent where carbon storage and renewable energy are available. Those figures are targets for technologies still being developed, rather than emissions cuts already achieved.
The second workstream will continue trials using Pilbara ore to produce DRI, with further processing planned in Baowu’s proposed demonstration ESF, which could potentially provide a lower-emissions route for Pilbara material in steelmaking processes that use hydrogen and electricity.
BHP said an earlier trial in Baowu’s one-million-tonne-a-year hydrogen-based DRI furnace produced iron with half the carbon dioxide emissions intensity of blast furnace-based metal.
Subsequent pilot-scale ESF tests indicated the pathway’s potential to make steel at near-zero emissions intensity.
Further demonstration work is needed before that potential can be established at commercial scale. BHP’s release defines “near zero” using a threshold of 0.40 tonnes of carbon dioxide equivalent per tonne of crude steel for production using only ore.
The renewed deal also follows the companies’ collaboration with Monash University, where in 2023 BHP said it would provide $12 million over three years to the Industry Knowledge Centre for Low Carbon Metallurgy.
Its research program includes testing ways to cut emissions from existing blast furnaces, including gas recycling, lower-carbon fuels and carbon capture.
The Baowu work sits alongside another Australian project examining the DRI–ESF route. As reported last year, BHP, Rio Tinto and BlueScope have partnered in the proposed NeoSmelt pilot plant at Kwinana, which aims to show that Pilbara ore can be used to produce lower-carbon iron.
The renewed Baowu agreement gives the partners five more years to move those options through further trials and demonstration.