BHP Group has cautioned that producing green iron in Australia remains economically unviable, even in the wake of a landmark Australia-China agreement aimed at decarbonizing the global steel supply chain, which is responsible for nearly 10% of worldwide carbon emissions, according to Reuters.
BHP’s Australian President, Geraldine Slattery, voiced the concerns during a recent meeting between Chinese and Australian industry leaders. She stated that, even with strong policy incentives, green iron production costs in Australia would be twice as high as in regions like the Middle East and China, and geographic isolation adds logistical hurdles with key customers located “many thousands of kilometers away.”
High Hurdles for Domestic Green Iron
Australia currently supplies about 60% of China's iron ore, but most of it is low-grade and requires additional processing before it can be used in green steel production. Converting this ore into green iron—a low-carbon steelmaking input—requires an extra step powered by renewable hydrogen or biomass instead of traditional coal.
However, these clean-energy alternatives aren't expected to scale commercially until well into the 2030s, raising doubts over Australia's ability to become a major player in green iron production in the near term.
While the Australia-China partnership signals a shared ambition to reduce emissions across the steel supply chain, BHP’s remarks underscore the economic and technological challenges that lie ahead.
VietnamSteel by Hoa Sen Group
