As pressure mounts on the steel sector to meet net-zero targets, iron ore miners are being pulled directly into the decarbonisation race.
The steel industry, responsible for around 8 per cent of global greenhouse gas emissions, is undergoing a profound transformation.
With half of the world’s largest producers now pledging to reach net zero by 2050, the expectations placed on their suppliers — particularly miners — are growing sharper.
Few feel this as acutely as Rio Tinto, whose scope 3 emissions account for 95 per cent of its carbon footprint, with nearly 70 per cent stemming from steelmaking.
In 2023, the processing of its ore alone contributed an estimated 14 per cent of total global steelmaking emissions.
For miners, however, supporting lower-carbon steel pathways isn’t optional.
“Because steelmakers are asking for it,” says Jon Stewart, CEO of Binding Solutions, whose BHP-backed cold agglomeration technology reduces emissions in ironmaking.
“Miners are ‘forced’ to get involved in their customers’ decarbonisation efforts.”
One of the clearest shifts is the rising importance of higher-grade ore.
Low-carbon steelmaking routes, such as direct reduced iron (DRI) and electric arc furnaces (EAF), generally require feedstock with an iron content above 67 per cent and low impurities.
“Especially considering government policy is increasingly based around net-zero targets,” said Marty Knauth, CEO of Zanaga Iron Ore Company.
He added that the transition will place premiums on higher-grade ores. Zanaga, which controls Africa’s largest known iron ore reserve in the Republic of Congo, has recently proved its ore can deliver the pellet feed required for DRI production.
This is a theme echoed by the industry at large.
BHP and China Baowu, for example, recently trialled Pilbara ores in commercial-scale DRI production, demonstrating route compatibility.
Meanwhile, Vale, Rio Tinto and Fortescue are directing capital towards developing or sourcing higher-grade material, a trend the Institute for Energy Economics and Financial Analysis predicts will reshape the iron ore trade.
The scale of the challenge remains daunting, however. Most available ore bodies — particularly in Australia — are of lower or mid-grade quality, requiring innovation to integrate into decarbonised steelmaking. Mining majors are thus pursuing multiple technological bets.
In Brazil, Vale is advancing briquette technology.
In 2023, it conducted more than 10 industrial-scale blast furnace tests, “including with 100 per cent briquettes,” a company spokesperson said.
“The results were excellent, both in productivity and production rate – better than with pellets.”
More than 10,000 direct reduction tests with global clients have also shown “extremely successful” results, with July production reaching 40,000 tonnes. Vale now plans a series of mega hubs to export low-emission steel inputs.
In Australia, Rio Tinto and BHP are developing electric smelting furnace (ESF) technology through the NeoSmelt consortium, supported by $19.8 million from the Australian Renewable Energy Agency.
A pilot capable of producing up to 40,000 tonnes per year could begin operating in 2028.
Meanwhile, Anglo American is backing PeroCycle, a UK project that uses double perovskite materials to split CO₂ into carbon monoxide mid-process — slashing emissions and offering drop-in potential for existing plants.
The technology, currently at laboratory scale, aims for commercial deployment by 2028.
“This is, I think, for several reasons: the company has a very large iron ore division, [high] scope 3 emissions, [and] therefore finding investments to support the decarbonisation of that is absolutely key,” explained Maxim Vreeswijk of Cambridge Future Tech.
Interim technologies are also attracting serious interest.
Binding Solutions claims its Cold Agglomerated Pellets process cuts energy use by up to 40 per cent while lowering CO₂ and pollutant emissions by 70 per cent.
Stewart argues it offers miners a critical transition tool, stating: “Miners need this interim technology and that is why they have an interest… Our technology is the conduit that allows them to do that.”
In Australia, CSIRO researchers are trialling dry magnetic separation for magnetite ores, reducing both water and energy use.
“Unlocking the right technologies is not the only challenge,” cautions CSIRO’s Humair Nadeem.
Broader planning, he says, must include infrastructure, workforce training and community investment.
Cost remains a major obstacle.
“If a miner can’t provide accurate, auditable numbers, they risk their shipments being hit with extra tariffs or losing contracts with European buyers who want verified ‘green materials’,” said Arif Gasilov of Gasilov Group.
He predicted stricter regulations will begin penalising firms not fully decarbonised by 2028–2030.
Still, many in the field agree that collaboration will accelerate progress.
“Ultimately, if one iron ore provider makes [the] most of the investments, they are helping the entire industry,” Vreeswijk said.
“A way to de-risk that is to invest more collaboratively, creating something like an industry syndicate to help their customers decarbonise.”
For the world’s iron ore miners, the message from customers is unambiguous: adapt or risk being left behind as the steel sector retools for a net-zero future.
