Mining giant BHP and Chinese steelmaking leader China Baowu Steel have renewed their steel decarbonisation partnership, signing a new five-year memorandum of understanding (MoU) to accelerate clean technology development across the steel supply chain.
Building on five years of joint initiatives launched in 2020, the extended agreement targets both immediate lower-emissions pathways and emerging technologies.
A primary focus of the renewed arrangement involves progressing modified blast furnace operations. By utilising BHP’s Pilbara iron ore, the companies aim to demonstrate a carbon dioxide emissions intensity at least 30 per cent lower than standard blast furnace processes, with potential reductions exceeding 80 per cent when combined with carbon storage and renewable power.
A secondary priority centres on direct reduced iron (DRI) trials using Pilbara ores, alongside planned processing in Baowu’s upcoming demonstration electric smelting furnace (ESF).
Previous trials using a 1 Mtpa hydrogen-based DRI furnace successfully generated iron with half the carbon dioxide intensity of conventional processes, while pilot-scale tests demonstrated the potential to achieve near-zero-emissions steelmaking.
The broader collaboration also encompasses joint research initiatives, such as the China Baowu–Monash University–BHP Industry Knowledge Centre for Low Carbon Metallurgy launched in 2024, which coordinates projects across Australian and Chinese institutions.
BHP confirmed it is actively co-funding demonstration and abatement projects to de-risk green steel pathways. The company aims to cut customer emissions by optimising existing infrastructure whilst enabling hydrogen- and electricity-driven operations that rely on Australian iron ore.
Industry leaders noted that joint efforts across the value chain remain essential to tackle the significant decarbonisation challenges facing the hard-to-abate steel sector.
As a world-leading steelmaker, China Baowu plays an active role in identifying and progressing the work required to implement lower emissions technologies to reduce carbon emissions from steelmaking.
