BlueScope is building a green steel plant within the steelworks to trial new ways to make steel with lower emissions.
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The plant is part of the steelmaker's earlier commitment to spend $150 million on greener initiatives.
It will look at using hydrogen to make steel.
The hydrogen is used to remove the oxygen from the iron ore, which is then poured into a melter to bring it to a liquid form and skim off any impurities.
It's a process that effectively replaces the work now done by the blast furnace.
Whether BlueScope hires extra workers will depend on the size of the pilot plant.
It is one of the study areas that fall under a memorandum of understanding (MUA) BlueScope has signed with key iron ore supplier Rio Tinto to research low emissions options across the entire steel supply chain.
Another priority area of study is to look for technologies that could reduce the carbon emissions from existing iron and steelmaking processes.
Rio Tinto will also be looking at ways to remove impurities before shipping it to BlueScope.
... this is an example of two significant Australian businesses getting on with real action
- BlueScope CEO Mark Vassella
"We are pleased to be working with Rio Tinto who supply the majority of iron ore to our Port Kembla plant," BlueScope CEO Mark Vassella said.
"It's a natural fit for us both and a meaningful opportunity for Australian steelmaking and mining to explore ways of contributing to emissions reduction targets.
"The new collaboration will focus on utilising green hydrogen for direct reduction of Rio Tinto's Pilbara iron ores, which will then be fed into a melter.
"This is an important program - one which will need broad support from governments, regulators, customers and suppliers.
"At a time when there is much talk and expectation about decarbonisation, this is an example of two significant Australian businesses getting on with real action. We are putting our dollars and our people right on the front line of addressing climate change."
Rio Tinto Iron Ore Chief Executive Simon Trott said the miner was keen to be involved.
"It is very early days, but both BlueScope and Rio Tinto are committed to net zero greenhouse gas emissions by 2050 and we realise that, to get there, we need to investigate multiple pathways," Mr Trott said.
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Glen Humphries
I'm an award-winning senior journalist with the Illawarra Mercury and have well over two decades' worth of experience in newspapers. I cover the three local councils in the Illawarra for the Mercury, state and federal politics, as well as writing for the TV guide. If I'm not writing, I'm reading.
I'm an award-winning senior journalist with the Illawarra Mercury and have well over two decades' worth of experience in newspapers. I cover the three local councils in the Illawarra for the Mercury, state and federal politics, as well as writing for the TV guide. If I'm not writing, I'm reading.
