🪨 Rock solid
Australia needs to act fast on its green steel opportunity
Good morning climate-curious folks,
This week’s newsletter:
— The similarity between “Crazy Rich Asians” and Australian mining
— Why we’re not invited (yet) to China’s clean steelmaking party
— How to dress (Australia’s ores) for success
📊Australia loves big rocks
Remember that scene in the movie Crazy Rich Asians where Rachel finally realises her boyfriend Nick isn't just some regular academic? She's been dating him for months, wondering how he affords nice dinners and weekend trips. Then they land in Singapore and she sees the fleet of luxury cars, the family estate, the sheer scale of wealth that was invisible to her.
That's basically Australia's relationship with mining.
For most of us, mining feels distant, almost irrelevant to our daily lives. But underneath our "lucky country", we're sitting on a fortune in rock form. We are, after all the world’s largest exporter of iron ore (by far).
The numbers alone show the outsized contribution mining makes to Australia’s economy:
Mining as a sector makes up >12% of Australia’s GDP (~$340b)
Iron ore alone makes up a third of this, and forms >20% of Australia’s exports
And yet: most Australians (including myself) have never set foot near a mine.
Just like Rachel's moment of realisation, once you see the role of mining (and iron ore) in Australia’s economy, you can't unsee it.
🚢 The story: Australia ships rocks, China makes steel, the world gets built
Here’s a simplified version of how the global steel supply chain works.
⛏️Step 1: Australia digs and ships iron ore
Australia extracts >900 million tonnes of iron ore annually. Think massive mines in Western Australia’s Pilbara region. Over 80% of this gets loaded onto ships bound for China.
⚗️ Step 2 and 3 : China uses iron ore to make steel
China feeds this iron ore into massive blast furnaces along with coal to create pure iron. This pure iron then is then processed further in a Basic Oxygen Furnaces (which blow oxygen into molten iron) to remove impurities to produce different types of steel with specific properties.
🏗️ Step 4: The world gets built
That Chinese steel becomes construction materials, appliances, cars, and infrastructure used globally. Your Samsung fridge, Toyota Camry, even the iPhone in your pocket - all contain steel that likely started with some Australian iron ore.
😭 The problem: clean steel methods aren’t compatible with Australia’s rocks (yet)
Here's where things get complicated for Australia.
For over a century, steel has been made by feeding iron ore and coal into massive blast furnaces. This process is very carbon intensive. Now the world is shifting to cleaner methods.
The catch?
Common cleaner production methods typically require high-grade iron ore. Australia's Pilbara ore is naturally lower-grade (~56–62% iron content), making it incompatible with most commercial clean steel technologies 😖
Australia needs an invitation to the clean steelmaking party, but our rocks aren't dressed for the occasion yet.
The two most common technologies are:
💧1. Direct Reduced Iron (DRI) : DRI is a method that uses hydrogen instead of coal to extract iron from ore, producing water vapour instead of CO2.
⚡️2. Electric Arc Furnaces (EAF) : EAFs are an alternative to blast furnaces which is more energy efficient. EAFs can either melt scrap steel for recycling or process direct reduced iron to create new steel from ore.
China is leading the charge towards adopting more DRI and EAF in their steelmaking methods, with plans to increase EAF steel production from 10% to 30% by 2035.
💚 Australia's green steel opportunity
So here's where things get exciting.
Currently, several major public-private partnerships are advancing technologies to make Australia's lower-grade iron ore compatible with clean steel production.
Some technologies/projects to know about:
🫠NeoSmelt - Neosmelt is a groundbreaking joint venture between BlueScope, BHP, Rio Tinto, Woodside, and Mitsui investigating a DRI Electric Smelting Furnace (DRI-ESF) pathway that can use Pilbara ore directly.
🍋ZESTY - Calix’ Zero Emissions Steel Technology (ZESTY) project can use green hydrogen in a renewably powered reactor to reduce ironmaking emissions intensity to near zero.
🧶The Untangled take:
Iron ore exports are a critical pillar of Australia's economic foundations. As steel production methods evolve globally toward clean technologies that aren't compatible with Australia’s natural ore grade, we need to adapt fast.
The pathway is clear: develop and scale technologies that make lower-grade Australian iron ore compatible with clean steel production. This requires government investment to assist commercialisation of these capital-intensive technologies.
🗞️ Australian green steel news
🤝In July 2025 Australia and China held a green steel roundtable with Chinese officials and Australian resources leaders including executives from BHP, Rio Tinto, Fortescue and Hancock was a potential watershed in China-Australia trade collaboration.
💸A $1 billion Green Iron Investment Fund was announced by the Albanese government in Feb 2025 to boost clean energy, green iron manufacturing and supply chains.
🌍 Meanwhile, around the world
🇨🇳 CHINA: No new coal-based steelmaking capacity was approved in the first half of 2024. Only electric arc furnaces got the green light.
🇸🇪 SWEDEN: Stegra is building the world's first large-scale integrated green steel plant in Sweden, featuring a ~700MW electrolyser and expected to eliminate 7 million tonnes of CO₂ emissions annually when operational in 2026
🇱🇾 LIBYA: In Feb 2025, Libya unveiled plans to become a supplier of direct reduced iron (DRI) in the Mediterranean basin and beyond with the announcement of a DRI complex to be built in the Benghazi region.
🇪🇺 EUROPEAN UNION: The EU's Carbon Border Adjustment Mechanism (CBAM) starts taxing high-carbon steel imports in 2026. In other words: carbon-intensive steel becomes expensive steel, creating greater market demand for cleaner alternatives.
🌯That’s a wrap!
It’s time to dress Australia’s iron ore for success in the new steel economy.
What would a clean metals industry actually look like to you? Let's keep this conversation going - I'd love to hear your take. Let me know in the comments.
Until our next bite-sized topic,
Linda
Great article! An interesting challenge for Australian iron ore that I didn't know about.
Super easy to understand, lots of great facts here!!