BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO) shares failed to climb with the market on Tuesday.
Both miners finished the session slightly lower for the day.
Whereas the S&P/ASX 200 Index (ASX: XJO) snapped its losing streak with a 0.8% gain to 8,314 points.
This was despite the two mining giants announcing plans to develop the largest ironmaking electric smelting furnace pilot plant study in Western Australia.
Image source: Getty Images
What was announced?
This morning, Rio Tinto revealed that the two miners, along with BlueScope Steel Limited (ASX: BSL), have selected the Kwinana Industrial Area, south of Perth, as the location to develop Australia's largest ironmaking electric smelting furnace (ESF) pilot plant. It will be known as the NeoSmelt pilot plant.
The company highlights that the "groundbreaking project" combines the expertise of BlueScope, BHP, and Rio Tinto to test technology to enable the use of Pilbara iron ore to produce iron without the need for traditional blast furnace. This is part of their joint aim of accelerating the decarbonisation of steelmaking.
Woodside Energy Group Ltd (ASX: WDS) is also looking to get involved. It will join the consortium as an equal equity participant and energy supplier. This is subject to finalising commercial arrangements.
What is the pilot plant?
The release notes that the pilot plant aims to prove Pilbara iron ore can be used to produce lower-carbon emissions molten iron using direct reduced iron (DRI)-ESF technology.
The pilot plant would produce 30,000 tonnes to 40,000 tonnes of molten iron a year. It will initially use natural gas to reduce iron ore to DRI, but once operational, the project aims to use lower-carbon emissions hydrogen to reduce iron ore.
Commenting on the pilot plant study, Rio Tinto's Iron Ore Chief Executive, Simon Trott, said:
We must find better ways to produce the most commonly used metal in the world, while meeting the needs of our planet and our climate objectives. We are excited to announce the location for Australia's largest ironmaking ESF pilot plant is in Western Australia.
It's just one of the ways we're working with our peers to develop the technology needed to reduce the carbon intensity of iron and steelmaking. The NeoSmelt pilot plant builds on the suite of projects Rio Tinto has underway with our customers and suppliers to find better ways to accelerate their efforts to meet their decarbonisation targets.
This sentiment was echoed by BHP Western Australia Iron Ore (WAIO) Asset President, Tim Day. He said:
We're thrilled to be well on our way to bringing this cutting-edge technology to life right here in Western Australia. A successful pilot plant of this scale would be a huge achievement as we work with our partners, here and around the world, to help fast-track near-zero emission pathways for steelmakers using Pilbara ores.
These are the Pilbara ores that power this nation's economy, so getting it right would be a major step forward in setting up WA and Australia to be an important part of a low greenhouse gas emission future.
