BHP has signed a term sheet agreement with a world leading steelmaker, China-based HBIS Group, to support the development of alternate electrified pathways of steel production for a wider range of iron ores, in an effort to drive emissions reduction in the sector.
Under this new agreement, the parties aim to trial commercial-scale direct reduced iron (DRI) production using BHP iron ores in blends at HBIS’s newly commissioned DRI plant and then evaluate the performance of the DRI in downstream steelmaking steps. The DRI plant uses hydrogen-rich gas byproducts in the steelworks to convert ore into a metallic iron product that is further refined for steel.
Additionally, the enhanced lump stage two trial will focus on the existing blast furnace (BF) steelmaking route, with the aim of reducing carbon emissions by increasing the use of direct charge lump and reducing the need for agglomerated feed which requires fossil fuel energy.
BHP’s latest collaboration agreement with HBIS is set to tap into the investment of up to US$15 million over three years proposed by BHP and HBIS in an earlier Memorandum of Understanding (MoU) signed in 2021.
BHP’s CEO, Mike Henry, said that HBIS Group is a key partner to BHP and an industry leader in assessing and demonstrating a range of potential pathways to reduce GHG in steelmaking.
“Our work with customers like HBIS Group, together with our own actions, aims to accelerate progress in reducing greenhouse gas emissions right along the value chain,” Mr Henry said.
BHP’s Chief Commercial Officer, Vandita Pant, said that she is delighted to build on BHP’s existing partnership with HBIS Group, one of the world’s largest steelmakers and an important customer for BHP’s high quality Pilbara iron ores.
“DRI is an important element of our pathways to near-zero emission steel production and in the decarbonisation journey of the steel industry,” Ms Pant said.
“We are working with HBIS Group to demonstrate the use of BHP iron ores in DRI production trials. Together with other collaborations we have underway, including electric smelting furnace (ESF) development, the outcomes are expected to provide pathways to reduce carbon emissions from steel production using BHP’s products.”
HBIS Chairman, Yu Yong, said that HBIS and BHP are aligned in their aims to help develop greener, low-carbon solutions that can reduce emissions in steelmaking.
“The agreement signed today is another landmark following our substantive cooperation in areas such as CCUS, and highlights HBIS’s efforts to build a low-carbon raw material supply chain,” Mr Yong said.
“HBIS looks forward to strengthening our comprehensive strategic synergy with BHP in the sustainable development of steel in the years ahead.”
