NeoSmelt, an Australian joint venture (JV) formed to advance lower-emissions steelmaking from Pilbara iron-ore, has secured fresh federal funding and welcomed two new partners to its decarbonisation initiative, as the consortium prepares to build what could become the country’s biggest ironmaking electric smelting furnace.

The group – originally founded by BlueScope, BHP and Rio Tinto – has signed Woodside Energy and Mitsui Iron Ore Development as equal equity participants. The five parties will now each hold an equal stake in the NeoSmelt JV, managed by BlueScope.

The Australian Renewable Energy Agency (Arena) has committed A$19.8-million in funding for a front-end engineering design study to support NeoSmelt’s feasibility phase. The study will assess the viability of producing molten iron with a smaller carbon footprint by using a direct reduced iron-electric smelting furnace (DRI-ESF) pathway, which is an alternative to conventional blast furnace technology.

The electric smelting furnace is a technology advance that could reduce emissions by as much as 2 t of CO₂ per tonne of steel produced. The innovation would cut emissions by millions of tonnes of CO₂ each year if rolled out Australia-wide.

“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,” said BlueScope CE Australia Tania Archibald.

“We also officially welcome Woodside Energy and Mitsui Iron Ore Development to the NeoSmelt JV, 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 pilot plant is planned for the Kwinana Industrial Area, south of Perth. If approved, the facility would begin operations in 2028, producing 30 000 t/y to 40 000 t/y of molten iron.

Woodside will serve as the project’s initial energy provider, supplying natural gas to reduce iron-ore to DRI in the early stages. Longer term, the project aims to switch to hydrogen to further cut emissions.

Federal Resources Minister Madeleine King said the initiative aligns with Australia’s ambitions to lead in clean energy technologies. “Now Kwinana is playing a central role in the world’s energy transition and a big part in global efforts to decarbonise. If we can decarbonise steelmaking, we will create far fewer emissions when building the cities of the world,” she said.

Western Australia has already committed A$75-million to the project. Premier Roger Cook said the pilot plant aligns with his administration’s focus on advanced manufacturing and low-carbon industry.

“Local manufacturing is crucial to my government’s plan for a future that is Made in WA – which is why we are working closely with the Commonwealth government and NeoSmelt to diversify Western Australia’s economy,” Cook said. “As a Kwinana local, I’m proud to see this NeoSmelt facility play a part in our state’s decarbonisation.”

If successful, NeoSmelt’s process could slash carbon emissions from steelmaking by up to 80% compared with the conventional blast furnace route. The project’s backers believe the technology could be scaled globally and allow Australian iron ore producers to remain competitive as international climate regulations tighten.

The final investment decision is expected in 2026.