Australia’s biggest company BHP and global engineering firm Hatch will partner to design and build an Electric Smelting Furnace (ESF) pilot plant in Australia.

Electric arc furnaces are becoming widely used to reduce the carbon produced in the molten iron and steelmaking process. While other ESF projects are well underway around the globe, the joint venture will represent BHP’s first foray into lower carbon smelting technology.

The pilot will assess the feasibility of a full-scale ESF plant. The facility will rely on iron ore produced by BHP’s Australian mines and replace the coking coal typically found in the steel smelting process with clean electricity and hydrogen.

The small-scale demonstration plant will open up collaboration opportunities with steel producers and technology providers to accelerate the scale-up of ESF plant designs.  

The latest data suggests that more than 80% of emission reductions can be achieved with ESF technology when combined with a Direct Reduced Iron (DRI) step. Direct Reduced Iron (DRI) – also called sponge iron – is produced by directly reducing iron ore (lumps, pellets, or fines) into a high-Fe iron product. 

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Cleaning up a Dirty Business

Steelmaking is a notoriously dirty business.

Responsible for up to 9% of total global emissions and 25% of industrial emissions, cleaning up steel is a top priority.

Traditionally relying on coking coal to provide the heat to turn raw iron ore molten, new technological advances are making significant gains in decarbonising the industry.

An ESF system allows for greater flexibility in steelmaking.

ESF permits the input of raw materials and enables the use of electric arc furnaces to utilise scrap steel and high-grade DRI.

It can also be integrated into a steel plant’s existing downstream production units.  

At a glance, here are some of the critical benefits of Electric Smelting and Arc Furnaces for the reduction of CO2:

  • ESF uses electricity rather than fossil fuels to generate the heat needed to melt metals. 
  • So long as the power comes from clean sources, electric furnaces produce zero direct greenhouse gas emissions during operation.
  • They also have higher efficiency than traditional furnaces, requiring less energy to melt the same amount of metal for further energy savings.
  • Some countries are already incentivising ESF technology, with energy storage options expected to make them even more viable.

A Word From the Partners

BHP was understandably bullish about the announcement.

“We see the ESF process as a critical breakthrough in significantly reducing the carbon emissions intensity of steel production and one that provides an opportunity for iron ore from our Pilbara mines, BHP’s Chief Commercial Officer, Vandita Pant, said.

“The steel industry has identified the ESF as a viable option to use a wider range of raw materials. Steel companies globally are looking to build commercial-scale ESF plants as part of their CO2 emission reduction roadmaps.”

On the Hatch side, Managing Director for Bulk Metals, Joe Petrolito, lauded the partnership.

 “Hatch is excited to collaborate with BHP on this forward-looking initiative and is honoured to contribute to the efforts of an industry leader who is dedicated to driving tangible progress.”

“This project marks a significant milestone in pursuing decarbonisation within a challenging sector that underpins global infrastructure and progress.”


BHP and Hatch will partner to build a pilot plant using Electric Smelting Furnace (ESF) technology.

ESF plants are seen as a major step forward in reducing the carbon output from steelmaking.

The pilot plant will use iron ore sourced from BHP’s Australian operations while eliminating coking coal and using clean electricity and hydrogen instead.

It’s hoped the project will lead to a full-sized facility that reduces carbon emissions from the  iron and steelmaking process by more than 80%. 

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