Australian mining giant BHP and South Korea’s POSCO have signed a new memorandum of understanding (MoU) to jointly develop an innovative hydrogen-based ironmaking technology, marking a major step toward decarbonizing the global steel industry.
The partnership focuses on advancing POSCO’s HyREX technology, which uses hydrogen direct reduced iron (DRI) through fluidized bed reactors (FBR) combined with an electric smelting furnace (ESF) to melt the reduced iron. This process allows the direct use of fine iron ore without pelletizing, reducing both energy consumption and production costs compared to traditional shaft-based DRI methods.
The project will be implemented through a demonstration plant in Pohang, South Korea, with an annual production capacity of 300,000 tons, making it the first integrated facility in the world to combine hydrogen-based FBR and ESF technologies on an industrial scale. BHP’s Pilbara iron ore will be used in the trials, taking advantage of one of the world’s richest iron ore sources.
Construction of the plant is expected to begin soon, with commissioning targeted for 2028. The collaboration aims to accelerate the steel sector’s transition toward carbon neutrality, responding to growing global demand for environmentally friendly materials.
Rag Udd, BHP’s Chief Commercial Officer, said that the partnership represents “an important step forward in accelerating steel decarbonization and supporting the development of technologies that can continue to utilize Australian iron ore for decades to come.”
Meanwhile, Myungjong Cho, Head of POSCO’s Future Steel R&D Center, stated that the project builds on more than 20 years of experience with the FINEX process, emphasizing that cooperation with BHP “will help fast-track HyREX’s path to commercial operation.”
This initiative underscores both companies’ strong commitment to innovation and the development of multiple decarbonization pathways for the steel industry — including hydrogen-based ironmaking, carbon capture, utilization and storage (CCUS), and electrified steel production technologies.
