BHP and China Baowu recently celebrated a milestone under their climate change partnership supporting steelmaking decarbonisation – BHP’s Pilbara iron ores were successfully trialed for Direct Reduced Iron (DRI) production at commercial scale.

The trials were performed at China Baowu’s Baosteel Zhanjiang Iron & Steel Co., ltd (Zhanjiang Steel) in late 2024 using its 1Mtpa hydrogen-based DRI Shaft Furnace, which is the first of its size in China. During the trials, BHP iron ore fines, at different blending ratios, were pelletised before being converted to DRI in the Shaft Furnace with 70% hydrogen in the reducing gas, demonstrating the use of BHP Pilbara iron ores as a blend material suitable for commercial DRI production.

The resulting DRI was mostly consumed in a commercial scale Basic Oxygen Furnace (BOF) at the same site, displacing hot metal from the blast furnace (BF) and scrap. The DRI production had an estimated 50% lower CO2 emission intensity than the blast furnace hot metal (as calculated from the trial data).

In another first, as part of the trials, samples of the DRI were used by China Baowu in tests for pig iron production using its 500kg electric smelting furnace (ESF) at its Central Research Institute. The successful tests contributed towards the concept of the DRI-ESF steelmaking pathway and the suitability of Pilbara iron ores, a pathway with potential for >80% CO2 emission reduction (compared to conventional blast furnace steelmaking) or ‘near zero emissions’ intensity¹ when ‘green hydrogen’ and renewable electricity can be feasibly sourced.

In 2020, BHP and China Baowu signed a Memorandum of Understanding (MoU) to strengthen their collaboration in relation to climate change. Since then, both parties have jointly progressed multiple initiatives, including the above DRI trials and the establishment of a Low Carbon Metallurgy Industry Knowledge Centre.

Ben Ellis, BHP’s Vice President of Marketing Sustainability, said: “It is fantastic to see the progress we’ve made together with our long-term and valued partner, China Baowu, towards our 2030 goal and enabling the long-term use of our Pilbara iron ores in potential ‘near zero emissions’ pathways by demonstrating their suitability for use in commercial DRI production. Together with our partners, we also look forward to sharing the learnings with the broader steel industry.”

China Baowu’s Low Carbon Metallurgy Innovation Center’s Executive Deputy Director, Dr Mao Xiaoming, said: “As the largest steelmaker in the world, China Baowu aims to play an active role in working with our partners to identify and implement low carbon technologies to reduce the CO2 emissions from the steelmaking. The milestones we’ve made with BHP are very good examples for how partnerships can support the steelmaking decarbonisation.”

Wen Dun, Zhanjiang Steel’s Vice President, said “Innovation is always one of the core competitiveness of Zhanjiang Steel. The successful commercial-scale trials using BHP’s Pilbara iron ores largely extended the raw material options for DRI technologies, supporting a potential widespread use of the technologies in the future.” 

Left: Mr Wen Dun (China Baowu), Middle: Dr. Ben Ellis (BHP), Right: Dr Mao Xiaoming (China Baowu)

¹ ‘Near zero emissions’ for steelmaking’ is 0.40 tonnes of CO2-e per tonne of crude steel for 100 per cent ore-based production (no scrap), as defined by the International Energy Agency (IEA) and implemented in Responsible Steel International Standard V2.0 (‘near zero’ performance level 4 threshold). IEA (2022), Achieving Net Zero Heavy Industry Sectors in G7 Members, IEA, Paris, License: CC BY 4.0, which also describes the boundary for the emissions intensity calculation (including in relation to upstream emissions).