PERTH (miningweekly.com) – Mining major Rio Tinto has signed a memorandum of understanding (MoU) with the world’s largest steelmaker China Baowu, to explore a range of industry-leading new projects in China and Australia to help decarbonise the steel value chain.

Under the MoU, China Baowu and Rio plan to jointly advance specific decarbonisation projects, demonstrating their commitment to play a leading role in the industry’s low-carbon transformation.

The projects will include researching, building and demonstrating a pilot-scale electric smelter at one of Baowu’s steel mills in China. This will enable low-carbon steel-making utilising direct reduced iron (DRI) that has been produced from low- and medium-grade ores.

The companies will also work to optimise pelletisation technology for Australian ores as a feedstock for low-carbon shaft furnace-based direct reduction, and will expand the development of China Baowu’s HyCROF technology which can largely mitigate carbon dioxide emissions from the blast furnace process.

Furthermore, the two companies will jointly study opportunities for producing low-carbon iron in Western Australia.

To progress each initiative, both companies have committed to sharing resources and expertise.

“Rio Tinto and China Baowu are united in a commitment to accelerating the delivery of low-carbon solutions for the entire steel value chain. This MoU aims to address one of the biggest challenges faced by the industry – developing a low-carbon pathway for low- to medium-grade iron-ores, which account for the vast majority of global iron-ore supply,” said Rio chief commercial officer Alf Barrios.

“China’s commitment to curbing emissions and promoting high-quality green development is strongly aligned with our own position where climate change and the low-carbon transition are at the heart of our strategy.”

Rio Tinto CEO of iron-ore Simon Trott said on Monday that Rio’s relationship with China Baowu in Western Australia had been a proud and successful one, extending back more than 40 years.

“We look forward to progressing this study into the potential of low-carbon iron making in Western Australia as we work to ensure a positive future for Pilbara ores in a green steel world,” he added.

The MoU follows the recently announced A$2-billion Western Range Joint Venture in the Pilbara region of Western Australia, involving Rio Tinto and Baowu.

China Baowu said on Monday that with the mission of building an industrial ecosystem to promote the progress of human civilisation, the company was committed to working with Rio to jointly study and provide low-carbon and green comprehensive solutions for the steel value chain, help the low-carbon transformation and upgrade of the steel industry chain, and support the world to address the challenge of climate change with pragmatic actions.