The Federal Government, through the Australian Renewable Energy Agency (ARENA), has committed $19.8 million to support the development of lower-emissions metal production in Western Australia.
The funding will support the NeoSmelt project, a joint initiative involving BlueScope, BHP, Rio Tinto, Woodside Energy and Mitsui Iron Ore Development, to advance plans for Australia’s largest ironmaking electric smelting furnace pilot plant at Kwinana, Western Australia.
The funding will support a front-end engineering design (FEED) study to assess the direct reduced iron-electric smelting furnace (DRI-ESF) process, which is being considered as a potential pathway for producing lower-emissions steel from Australian iron ore.
ARENA CEO Darren Miller said the initiative underscores the importance of cross-sector collaboration in addressing industrial emissions.
“Globally, the steelmaking industry makes up around eight per cent of global greenhouse gas emissions, so the decarbonisation opportunity is huge,” 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,” he added.
“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.”
The DRI-ESF route aims to demonstrate that molten iron with reduced carbon emissions can be produced using Pilbara iron ore.
The Kwinana Industrial Area, south of Perth, has been identified as the preferred site for the proposed pilot plant. The FEED study will help determine the project’s technical and commercial feasibility, paving the way for a potential final investment decision.
BlueScope Chief Executive Australia, Tania Archibald, speaking on behalf of the joint venture, welcomed the ARENA support and industry collaboration.
“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,” Archibald said.
“We also officially welcome Woodside Energy and Mitsui Iron Ore Development to the NeoSmelt joint venture, joining founding participants BlueScope, BHP and Rio Tinto,” she added.
“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 NeoSmelt project aligns with ARENA’s broader investment focus on low-emissions metals through its Industrial Transformation Stream.
Round 2 of the program is currently open, with applications closing on 15 July 2025.
