Fortescue said on Wednesday that it would partner with a wholly-owned subsidiary of China Baowu Steel Group, the world’s largest steelmaker, to address challenges in decarbonizing the global steel industry.
Fortescue, the world’s fourth-largest iron ore supplier, signed a memorandum of understanding with Baowu Resources earlier this week, the company said on its WeChat account.
“We are committed to building a green iron supply chain,” the company statement said, quoting Fortescue COO Shelley Robertson.
“The partnership with China Baowu will help further accelerate the development of green iron technology and ensure that we will be able to meet the growing demand for green iron in and outside China.”
Fortescue’s green iron project at its Christmas Creek operations in Western Australia is underway. It is set to produce more than 1,500 metric tons of green iron annually, with the first production expected in 2025. The company also aims to make all its iron ore products green by 2030.
The plant will use green hydrogen in a reduction furnace to turn iron ore into sponge iron, which is then processed in an electric smelting furnace to produce high-purity green iron.
Australia, the world’s top iron ore exporter, could lose up to half its revenue from the sector if it doesn’t ramp up green iron production quickly, as other countries begin producing steel using renewable energy, according to a think-tank’s report last November.
Fortescue CEO Dino Otranto said last October that Australia risks losing its dominant position in the global iron ore market if it does not act swiftly to produce green iron.
(Reporting by Amy Lv and Lewis Jackson in Beijing; Editing by Sherry Jacob-Phillips)
