ARENA awards $19.8 million to Kwinana green iron project

The federal government’s Australian Renewable Energy Agency (ARENA) has awarded a $19.8 million grant to support NeoSmelt – a joint venture between BlueScope, BHP, Rio Tinto, Woodside Energy and Mitsui Iron Ore Development – progress towards a planned low-emissions iron pilot plant at Kwinana.

According to a statement on Tuesday from energy minister Chris Bowen and others, the funding will support a $48.8 million Front-End Engineering Design study for an electric smelting furnace (ESF) ahead of a final investment decision scheduled for next year.

“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,” said Tania Archibald, Bluescope’s Chief Executive Australia.

According to NeoSmelt, the plant will produce between 30,000 to 40,000 tonnes of molten iron a year. Operations are planned for 2028 if the plant is built.

According to the release from Bowen, the furnace would reduce carbon dioxide emissions by up to 2 tonnes per tonne of steel produced, amounting to “millions of tonnes of carbon dioxide each year if rolled out Australia-wide.”

If the plant at Kwinana went ahead, it would generate “up to 100 full-time equivalent roles” when in operation, and as many as 300 during construction.

The $19.8 million grant came through the Industrial Transformation Stream of federal Powering the Regions Fund, which has a total budget of $1.9 billion

“The fuels, metals, fertiliser, chemicals, and grain shipped from Kwinana have powered Western Australia and the region since the 1950s,” said resources minister Madeleine King in a statement.

“Kwinana is now playing a central role in the world’s energy transition and a big part in global efforts to decarbonise.

“If we can decarbonise steel making, we will create far fewer emissions when building the cities of the world.”

The NeoSmelt consortium was formed in February 2024 by BlueScope and iron ore miners, BHP and Rio Tinto. Woodside Energy and Mitsui Iron Ore Development were announced as additional equity partners on Tuesday.

Picture: piles of iron ore at Cape Lambert, Australia (credit Rio Tinto)

Further reading

BlueScope, BHP and Rio Tinto select Kwinana for 40,000 tpa green iron pilot plant