The Australian government has awarded a A$19.8 million ($13 million) grant to the NeoSmelt green iron consortium to advance the development of an electric smelter in Western Australia. The funding will support a A$48.8 million engineering study, according to Climate Change and Energy Minister Chris Bowen.
NeoSmelt, which includes major producers BlueScope Steel, BHP, Rio Tinto, Mitsui, and Woodside Energy, plans to make a final investment decision in 2025. The project aims to produce 30,000-40,000 tonnes per year of low-carbon direct reduction iron starting in 2028. Initially powered by natural gas, the facility may later transition to renewable hydrogen.
The government will also support the initiative through its A$14 billion green hydrogen subsidy scheme, offering tax credits for low-carbon hydrogen production from 2027. Additionally, the A$1 billion green iron investment fund will back early-stage projects to attract private investment.
This move aligns with Australia’s push to reduce industrial emissions and strengthen its role in the global green metals market. NeoSmelt’s expansion highlights growing collaboration between mining and energy sectors to decarbonize heavy industry.
