The Australian Renewable Energy Agency (ARENA) has allocated $19.8 million in funding to the NeoSmelt project to investigate the development of Australia's largest ironmaking electric smelting furnace pilot plant at Kwinana, Western Australia.
NeoSmelt is a groundbreaking joint venture, combining the expertise of BlueScope, BHP, Rio Tinto, Woodside and Mitsui Iron Ore Development. ARENA funding will go towards a front-end engineering design (FEED) study for the NeoSmelt project to progress the direct reduced iron-electric smelting furnace (DRI-ESF) route for lower-emissions steelmaking.
The DRI-ESF route is a transformative concept with the potential to overcome barriers using Australian iron ore in future lower-emissions steelmaking. Using the electric smelting furnace technology, the project aims to prove that it is possible to produce lower-carbon emission molten iron from Pilbara iron ore.
ARENA CEO Darren Miller said to decarbonise mining and metal production in Australia, collaboration and partnership across industry is crucial.
"Globally, the steelmaking industry makes up around eight per cent of global greenhouse gas emissions, so the decarbonisation opportunity is huge," Mr Miller said.
"The NeoSmelt project brings together some of the world's largest players in the mining, metals and energy industries, in a collaborative effort to reduce emissions in the sector. This represents what the energy transition is all about - working together to achieve the most efficient and effective outcome for Australia's key export industry to transition into a lower-emissions economy."
"As the world's largest producer of iron ore, Australia has an important role to play in reducing emissions across the steel value chain. We're excited by the insights this project expects to provide. This is a positive step towards building a lower-emissions steel industry here in Australia."
Late last year, the Kwinana Industrial Area, south of Perth, was announced as the preferred location to develop the first of a kind pilot plant. The FEED study, to be supported by funding from ARENA, is expected to help inform a final investment decision for the pilot plant to be built.
BlueScope Chief Executive Australia, Tania Archibald, on behalf of the joint venture said today marks a significant step forward in developing a technology for lower-carbon emissions steelmaking using Pilbara ore and we're delighted by ARENA's $19.8 million commitment to support the feasibility phase of this groundbreaking R&D pilot plant.
"We also officially welcome Woodside Energy and Mitsui Iron Ore Development to the NeoSmelt joint venture, joining founding participants BlueScope, BHP and Rio Tinto. With this backing from government and industry leaders, we now have the opportunity to develop world leading technology that will have potential application across the global steel industry and provides the foundation for a future Australian lower-carbon emissions iron export industry."
The project builds on ARENA's priority in low emissions metals and is being delivered under the Industrial Transformation Stream. Round 2 of the Industrial Transformation Stream is currently open to new applications and is expected to close 15 July 2025.
