BlueScope delays Australian low-carbon iron pilot plant to 2029

BlueScope Steel Ltd.'s NeoSmelt pilot plant in Western Australia to test and optimize iron production from an electric smelting furnace is being delayed by a year, a NeoSmelt spokesperson said.

"2029 is now a more accurate reflection of project execution timing as a result of the detailed feasibility study underway," the spokesperson for the consortium, which is led by BlueScope, told Platts, part of S&P Global Energy, in an April 29 email.

The Australian steelmaker, along with iron ore producers Rio Tinto Group and BHP Group Ltd., chose Kwinana in December 2024 for what would be Australia's largest ironmaking ESF pilot plant. They also brought on large gas producer Woodside Energy Group Ltd. as an equal equity participant and energy supplier, as gas will be needed initially before using lower-carbon emissions hydrogen to reduce the iron ore once operational.

The pilot facility was originally planned to be operational in 2028 and expected to produce 30,000-40,000 metric tons/year of molten iron.

"The original 2028 operations target was set early in the project, before detailed engineering and construction planning had been completed. The updated start date in 2029 reflects a more accurate and realistic construction and commissioning timeline," the spokesperson said.

The NeoSmelt consortium, which also includes Mitsui & Co. Ltd. unit Mitsui Iron Ore Development Pty. Ltd., booked Hatch Ltd. in July 2025 to design the ironmaking ESF, which aims to demonstrate that Pilbara iron ore can be used to produce lower-carbon emissions molten iron using direct reduced iron-ESF technology.

"Hatch is responsible for project management and controls for the pilot feasibility study and engineering services for the electric smelting furnace and the balance of plant infrastructure supporting the pilot," the company said at the time.

Tania Archibald, BlueScope's managing director and CEO, said at the Melbourne Mining Club April 29 that a final investment decision on the pilot will be made at the end of 2026. The Australian Renewable Energy Agency provided A$19.82 million of NeoSmelt's A$48.85 million total cost in June 2025.

Shifting timelines

BlueScope's delay is understandable because "it is a pilot, so those schedules do shift," Anita Logiudice, policy and advocacy director at the Chamber of Minerals and Energy of Western Australia, told Platts.

All NeoSmelt partners are CME members except BlueScope, the industry group confirmed to Platts.

The project reflects industry's efforts to "prove up the [iron reduction] technology with gas while everybody is trying to get hydrogen up and running," Logiudice said.

Speaking about industry's efforts in the state more broadly, Logiudice said, "it's about looking at what's different for the development of the green industry and making sure that we're kicking off" key elements needed for downstream projects to get going.

These include "low emission, reliable and affordable electricity if we want a hydrogen-based iron industry," Logiudice said.

"That bigger picture thinking around the transition to green technology doesn't just happen overnight," the CME director said.

"It's going to be staged because there's big investment involved," Logiudice said regarding Western Australia's broader green iron ambitions.