Hematite and magnetite – a tale of two ores Of Australia’s 58 billion tonnes of “economically demonstrated resources” (EDR) of iron ore, hematite comprises 58%, while 41% is magnetite.20 To date, however, most (95%) of the country’s iron ore exports have been hematite, because it is considered high-grade in terms of iron content; in addition, it can be mined, crushed and screened with minimal processing before being fed into blast furnaces. This makes it cheap and fast to produce and export at scale. Two-thirds of the country’s hematite is found in the rocky ridges and plateaus of Pilbara in Western Australia (WA), where it is known as “direct shipping ore” (DSO).21 Hematite DSO exports from Pilbara are among the lowest-cost iron ore operations in the world, due to the industry’s huge operational scale, simple processing and efficient rail/port infrastructure. Meanwhile, magnetite ore, while containing a higher percentage of natural iron content, is usually considered lower-grade in raw form due to the presence of impurities.22 To make it commercial, it must be beneficiated, ground finely and magnetically separated into concentrate or pellets. This process requires expensive, energy-intensive processing plants, pushing up both capital and operating costs. Consequently, Australia’s iron ore industry since the 1960s has been built around bulk hematite exports from WA. However, Australia’s vast and largely untapped magnetite reserves – historically uneconomical to mine and process – have become more attractive with the rise of direct reduction technology, where iron ore is reduced to metallic iron at temperatures below the metal’s melting point. This process, which can use natural gas or hydrogen, avoids the need for highly-emitting coke-powered blast furnaces. Once magnetite has been processed into concentrated pellets, the result is a very high-purity, consistent feedstock that is more suitable for the direct reduced iron (DRI) process than hematite. Gas-based DRI using magnetite concentrate is a long-established commercial pathway. However, processing Australia’s abundant hematite ores into a state ready for DRI requires novel beneficiation and electric smelting furnaces (ESFs) that are still at pilot stage.23 Technology pathways towards green iron and steelmaking The so-called “porous iron” that results from the DRI process needs to be further compressed into dense briquettes while hot (~650 °C). This creates hot briquetted iron, which is 90-94% Fe and ideal as a feedstock in the production of steel using EAFs. To compete in the global low-carbon steelmaking sector, the consensus among the Adelaide workshop participants was that Australia needs to move up the value chain from exporting raw iron ore to exporting DRI-processed green HBI.24 When both the DRI process and EAFs are powered by green hydrogen and renewable energy respectively, the result is near-zero emissions steel. However, this process requires a substantial amount of renewable energy. A lively debate arose during the workshop between those arguing for the need to leapfrog directly to green hydrogen-fuelled near-zero emissions DRI and those promoting gas as a phased transition fuel towards lower-emissions DRI (see Box 2).2.1 Australia’s iron industry and low-carbon pathways The creation of a green metals industry in Australia is not a “nice to have”. It is absolutely essential to our national security. Elizabeth Thurbon, workshop participant19 Australia’s iron ore and steel sector status Unlocking Asia-Pacific as a First Mover: Australia’s Green Iron Opportunity 12

Unlocking Asia-Pacific as a First Mover 2025