Australia Approves $3 Billion Green Iron Project

Written by Martin Lynch, European News Editor for IIR News Intelligence (Sugar Land, Texas)

Summary

The Federal government of Australia has approved POSCO's Port Hedland green iron project, worth an estimated US$3 billion in investment.

Green Iron Push

Australia is backing its first push into the fledgling green iron sector by granting environmental permission for POSCO's US$3 billion Port Hedland project. 

The Western Australian regional government had already approved a plan by South Korea's POSCO to construct a low-emissions iron-ore processing plant. The Port Hedland Iron project (formerly known as the Port Hedland Green Steel Project) will use a direct reduced iron (DRI) furnace, initially powered by gas instead of coal to cut emissions, to produce hot-briquetted iron (HBI). According to Industrial Info Resources data, there are six associated projects worth US$3 billion in investment. A pilot hydrogen project is also being implemented which, if successful, will replace some of the gas used. 

Capacity & Technology

Once completed in 2031, it will have an annual production capacity of 2 million metric tons. The project is being constructed in the Boodarie Strategic Industrial Area, approximately 10 kilometers (km) southwest of Port Hedland, which itself lies in the Pilbara region, the heart of the country's iron and steel industry. A final investment decision on the plant is subject to approval from POSCO's partners, which include China Steel Corporation and Japan's Marubeni Corporation. It will use MIDREX Flex technology, initially powered by natural gas and blending in renewable hydrogen, to reduce emissions intensity by roughly 50%, according to POSCO. Initially, the project will consume between 3 million and 3.5 million tonnes per annum (Mtpa) of iron ore to produce 2 Mtpa of Hot Briquetted Iron (HBI) and 0.7 Mtpa of export iron ore pellets. The project will create roughly 1,600 construction jobs and 400 permanent jobs. 

Australia Leads World in Iron Ore 

Australia is the world's leading producer of iron ore. It produced 967.8 million tonnes (mt) of iron ore in 2025, up 1.4% year-on-year (YoY), and accounted for 36.8% of global output in 2024, according to a report by GlobalData, entitled Australia Iron Ore Mining to 2035. The vast majority of that - 911 MT - went to mainly Asian furnaces, in partuclar China and Japan, two of the world's top-three steel producers. The country also has the world's largest iron ore reserves, at 29% of the total, followed by Russia and Brazil at 17.5% and 17% respectively. Australia's iron ore sector is also one of the biggest emitters, and the government has set a target of cutting its overall climate emissions by 62%-70% by 2035, against a 2030 target of 43% below 2005 levels. 

Lowering Emissions

Earlier this summer, Energy Minister Chris Bowen launched the Safeguard Mechanism, which will review and apply restrictions on more than 200 of Australia's biggest polluters. The Safeguard Mechanism applies to those facilities or operations that emit more than 100,000 tonnes of greenhouse gases a year, including mines, liquefied natural gas (LNG) plants, steelworks, aluminium refineries, power plants, transport and large manufacturers. Speaking to the media, Climate Council senior advisor Ben McLeod said that the power and agriculture sectors had made significant efforts to cut pollution but other sectors needed to do more. "When we look around for our next best opportunity to cut climate pollution, it's really in the resources sector," he said. "When we look at coal, gas and iron ore mining corporations, they represent a significant share of Australia's pollution but they also have great options to cut it."

Green Iron Opportunity

Australia's government is keen for the country to become a leading global supplier of low-carbon, or green iron. It noted last year that almost half of its iron ore reserves is  magnetite, a "high-grade ore well suited to low-emissions green iron production." It also has abundant renewable energy resources, growing state funding and a large number of green hydrogen projects under development. Industrial Info Resources is tracking 79 green hydrogen projects across a number of industrial sectors, including mining, worth more than US$14 billion in investment. 

"The Australian Government recognises Australia's potential to become a cost-competitive green metals producer," stated the country's Trade and Investment Commission. "Its Future Made in Australia plan identifies green metals as a priority sector critical to Australia's net zero transformation and its industrial future." The government has allocated significant funding for green metals projects, including a AUD1$ billion (US$700 million) Green Iron Investment Fund, of which AUD$500 million (US$350 million) is allocated to help fund early-stage capital projects. The government has also set aside AUD$750 million (US$527 million) for the Future Made in Australia Innovation Fund for green metals. 

Key Takeaways

• The Federal government of Australia has approved POSCO's US$3 billion Port Hedland green iron project.
• Australia is the world's leading producer of iron ore, mining 967.8 million tonnes (mt) of iron ore in 2025.
• Industrial Info Resources is tracking 6 associated projects worth US$3 billion in investment. 

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).