Calix (ASX: CXL) has made a significant breakthrough in its plans to develop a local green iron industry, with the signing of a $35 million joint development agreement (JDA) with Rio Tinto (ASX: RIO).
Rio Tinto is providing a combination of $8m in cash and further in-kind contributions towards the development of Calix’s Zero Emissions Steel Technology (Zesty) demonstration plant in Kwinana, Western Australia.
The JDA includes the potential for Rio Tinto to provide up to 10,000 tonnes of a range of Pilbara iron ores for use in plant commissioning and operations, and to also bring in potential users of the Zesty green iron product for material testing and downstream processing into steel.
Federal Government Backing
The Zesty plant has previously received federal government support through a grant of as much as $44.9m from the Australian Renewable Energy Agency (ARENA).
Calix chief executive officer Phil Hodgson said the joint development agreement with Rio Tinto was another major milestone for the project that would provide cash and hands-on support including industry leading resources, expertise, and market reach.
“This strong support from Rio Tinto provides further validation of the potential for the Zesty technology to be deployed to the world’s largest minerals and metals market, its potential to help decarbonise a critical industry responsible for approximately 8% of global CO2 emissions, and the opportunity to help future-proof Australia’s largest source of export income,” he said.
Notably, the Kwinana site is in close proximity to the NeoSmelt project for downstream processing of direct reduced iron currently being developed by Rio, BHP Group (ASX: BHP), BlueScope Steel (ASX: BSL), Woodside Energy (ASX: WDG), and Japanese multinational giant Mitsui.
Global Green Iron Strategy
The agreement comes as Australia moves to position itself as a front-runner in progressing environmentally friendly steel, with the federal government recently launching a $500m Green Iron Investment Fund.
Rio Tinto Iron Ore chief executive officer Matthew Holcz said the world needs low-emissions steel if it is going to decarbonise, with his company examining a range of ways Pilbara iron ores can be utilised as new technologies emerge.
Calix’s Zesty technology uses a combination of electric heating and hydrogen reduction to produce green iron and ultimately, green steel.
The technology aims to provide low-cost pathways through minimal hydrogen consumption and the elimination of ore pelletisation, enabling the use of fines and lower-grade iron ores.
