Green Iron and Beyond

Green iron and low-carbon metals are emerging as strategic priorities for the global mining industry, as South Africa and international producers invest in green hydrogen, renewable energy, innovative processing technologies and cleaner steelmaking to reduce emissions, strengthen industrial competitiveness and build sustainable mineral supply chains.

The global mining and metals industry is accelerating decarbonisation as governments, manufacturers and investors seek lower-emission supply chains. Green iron, produced using low-carbon energy and reducing agents such as green hydrogen, offers a pathway to reduce emissions and create higher-value industrial products.

 

South Africa is well positioned to participate, combining substantial mineral resources with strong solar and wind potential, established mining infrastructure and access to international markets. Its emerging green hydrogen industry could support domestic iron processing and lower-carbon steel production.

 

Recent developments highlight the sector’s momentum. In June 2026, UNIDO launched South Africa’s national project under the Global Clean Hydrogen Programme, a five-year initiative supporting hydrogen adoption and industrial decarbonisation.  In Australia, Fortescue produced its first hot metal at its Christmas Creek Green Metal Project in August 2026, demonstrating progress towards alternative ironmaking using Pilbara ore.

 

Globally, BHP, Rio Tinto, SSAB and LKAB are advancing hydrogen-based reduction, electrification and innovative processing technologies. However, commercial success depends on affordable renewable electricity, reliable hydrogen supplies, suitable iron ore, infrastructure investment and supportive policies. These factors will determine whether green iron becomes a competitive industrial commodity.

 

According to the International Energy Agency (IEA), the iron and steel sector accounts for approximately 2.6 billion tonnes of direct carbon dioxide emissions annually, equivalent to around 7% of global energy-system emissions. Decarbonising this sector is therefore essential to achieving broader climate objectives.

 

Why Is Green Iron Becoming Essential?

Several structural developments are accelerating the transition towards green iron and decarbonised metals.

1. Industrial decarbonisation: Conventional ironmaking relies heavily on coal-based coke to remove oxygen from iron ore. Replacing this process with hydrogen, renewable electricity and alternative reducing agents can significantly reduce emissions.
   
    
2. Growing demand for low-carbon materials: Automotive manufacturers, construction companies, renewable energy developers and infrastructure providers are increasingly examining the carbon footprint of steel and other industrial materials.
   
    
3. International trade requirements: The European Union’s Carbon Border Adjustment Mechanism (CBAM) entered its definitive phase on 1 January 2026, covering iron and steel among other carbon-intensive goods. Embedded emissions are consequently becoming an increasingly important consideration for exporters serving European markets.
   
    
4. Energy-transition opportunities: Green iron can connect renewable energy development with mining, metallurgy, transport and industrial manufacturing, potentially creating new investment opportunities.Resource competitiveness: Mining companies that develop suitable low-carbon processing technologies may gain access to emerging premium markets and strengthen their long-term commercial position.
   
    

Market Statistics

• Global crude steel production: Approximately 1.85 billion tonnes in 2025.
• Steel-sector emissions: Approximately 2.6 billion tonnes of direct CO₂ emissions annually.
• Conventional production: Blast furnace-basic oxygen furnace (BF-BOF) routes account for around 70% of global steel production.
• Hydrogen-based steelmaking costs: Early commercial hydrogen-DRI and electric arc furnace (EAF) pathways are estimated to cost approximately 50-140% more than conventional BF-BOF production, depending on regional conditions.
• South African decarbonisation initiative: The country’s steel-sector project, supported by the United Nations Industrial Development Organization (UNIDO), entered the Detailed Preparation Phase in March 2026.
• South African green hydrogen funding: The government reported €23 million (approximately US$25 million) in grant funding secured through Germany’s KfW Development Bank in June 2025 to support catalytic green hydrogen projects.
• Hydrogen storage innovation: The HYBRIT initiative reported in February 2025 that its pilot demonstrated the technical feasibility of large-scale underground storage of fossil-free hydrogen for iron and steel production.
• Rio Tinto’s low-carbon processing ambition: Its BlueSmelting technology has demonstrated the potential to reduce greenhouse gas emissions by up to 95% compared with the existing ilmenite-reduction process, according to the company.
• The global mining market is poised for significant growth, starting at USD 1,571.53 billion in 2026 and projected to reach USD 2,505.54 billion by 2035, with a CAGR of 5.36% from 2026 to 2035.
  
   

South Africa’s Green Iron Opportunity

South Africa is emerging as a potential green iron hub, combining abundant iron ore resources, renewable energy potential and established industrial infrastructure. The opportunity lies in producing lower-emission iron using green hydrogen and renewable electricity, strengthening domestic manufacturing and creating higher-value export opportunities.

In March 2026, the United Nations Industrial Development Organization (UNIDO), the Industrial Development Corporation (IDC) and Guidehouse Germany advanced the Accelerating South Africa’s Steel Decarbonization initiative into its Detailed Preparation Phase. Selected as one of seven projects from more than 500 global submissions, it proposes hydrogen-based direct-reduced iron (H₂-DRI) pilot facilities and renewable-powered steelmaking. South Africa is also Africa’s second-largest steel producer, making industrial decarbonisation strategically important. 

Green hydrogen funding: In June 2025, South Africa secured €23 million (approximately US$25 million) in grant funding through Germany’s KfW Development Bank to support catalytic green hydrogen projects. The conversion is approximate and depends on the exchange rate.

In September 2026, the government announced six priority green hydrogen projects, including the Saldanha Hydrogen Direct Reduced Iron Project, which remains at the pre-feasibility stage. The initiative aims to connect hydrogen production with lower-emission iron and steel manufacturing. 

However, commercial success depends on

affordable renewable electricity, suitable iron ore, water availability, hydrogen infrastructure and reliable financing. Coordinated investment and long-term customer demand will determine whether South Africa can become a competitive green iron exporter.

Major Developments Shaping the Global Green Iron Industry

1. Hydrogen-Based Direct Reduced Iron

Hydrogen-based direct reduced iron (H₂-DRI) replaces coal-derived reducing agents with hydrogen, potentially reducing ironmaking emissions when renewable electricity is used. Sweden’s HYBRIT initiative, involving SSAB, LKAB and Vattenfall, reported producing over 5,000 tonnes of hydrogen-reduced iron by August 2024. In February 2025, its 100-cubic-metre hydrogen-storage facility demonstrated the potential to reduce variable hydrogen-production costs by 25-40% under simulated future electricity-market conditions.

2. Fortescue Advances Green Iron in Australia

Fortescue’s Green Metal Project at Christmas Creek, Australia, combines Pilbara iron ore with innovative smelting technology and renewable energy. In August 2026, the project produced its first hot metal, marking progress towards lower-emission iron production. Commercial-scale output remains a future objective.

3. Rio Tinto Explores Alternative Reduction Technologies

Rio Tinto is developing BioIron, hydrogen-based reduction and electric smelting. Its 2025 Climate Action Plan indicates that BioIron could potentially reduce emissions by up to 95% compared with conventional blast furnace steelmaking, subject to renewable energy and sustainably sourced biomass.

4. BHP Supports Multiple Steelmaking Pathways

BHP is investigating blast furnace efficiency improvements, top-gas recycling and carbon capture. Its June 2026 assessment discussed potential emissions reductions of approximately 20% through incremental optimisation and up to 80% through more extensive interventions in suitable configurations.

5. Carbon Regulation Reshapes Global Metal Trade

The EU’s Carbon Border Adjustment Mechanism entered its definitive phase on 1 January 2026. Its coverage of iron and steel makes emissions measurement, verification and transparent carbon reporting increasingly important for international exporters, including South African producers.

 

What Challenges Could Limit Green Iron Adoption?

Despite technological progress, the transition towards decarbonised metals faces significant financial, technical and infrastructure barriers.

 

• High production costs: Hydrogen-based ironmaking can be considerably more expensive than conventional production. The IEA estimates that early commercial hydrogen-DRI/EAF pathways may cost 50-140% more than BF-BOF production, depending on location and project conditions.
• Renewable electricity constraints: Electrolysers require substantial electricity to produce green hydrogen. Unreliable power supplies and limited transmission infrastructure can undermine project economics.
• Hydrogen infrastructure: Pipelines, storage facilities, water systems and hydrogen-handling equipment require major investment.
• Ore quality and processing: Not every iron ore deposit is suitable for existing direct-reduction technology. Beneficiation and alternative smelting processes may be necessary.
• Financing and market uncertainty: Investors need long-term purchase agreements, predictable regulations and confidence that lower-emission products will secure sufficient demand.
  
   

Strategies to Accelerate Decarbonised Metals Production

Successful implementation requires coordinated action across mining, energy, manufacturing, finance and government.

1. Prioritise renewable energy and hydrogen infrastructure: Develop integrated industrial hubs that connect renewable electricity, electrolysers, iron ore processing and steelmaking facilities.
2. Expand pilot projects: Test hydrogen reduction, electric smelting, beneficiation and alternative reducing agents under real operating conditions before committing to full-scale investment.
3. Strengthen mining and technology partnerships: Collaboration among miners, steelmakers, universities, equipment manufacturers and energy companies can accelerate innovation and reduce technical risks.
4. Develop green-product markets: Long-term procurement agreements with automotive, construction and infrastructure companies can improve revenue visibility and support investment decisions.
5. Improve carbon accounting: Standardised lifecycle assessments and independently verified emissions data can help distinguish genuinely lower-emission metals from products relying on unsupported environmental claims.
   
    

Top 10 Companies and Organisations Influencing Green Iron and Decarbonised Metals

• BHP
• Rio Tinto
• Fortescue
• LKAB
• SSAB
• Vattenfall
• ArcelorMittal
• Anglo American
• thyssenkrupp Steel
• United Nations Industrial Development Organization (UNIDO)
  
   

1. BHP -Revenue: US$51.3 billion (FY2025). BHP supports steel decarbonisation through research into alternative ironmaking, electric smelting and lower-emission iron ore processing. Its initiatives aim to reduce steelmaking emissions, improve energy efficiency and support the transition towards more sustainable metals production.

 

2. Rio Tinto -Revenue: US$57.6 billion (2025). Rio Tinto advances decarbonisation through BioIron technology, hydrogen-based reduction, beneficiation and electric smelting. These innovations aim to reduce emissions from iron ore processing and support lower-carbon steel production.

 

3. Fortescue -Revenue: US$15.54 billion (FY2025). Fortescue is developing green iron production using renewable energy and innovative ironmaking technologies in Australia’s Pilbara region. Its initiatives aim to reduce fossil-fuel dependence, produce lower-emission industrial materials and strengthen Australia’s position in emerging green metals markets.

 

4. LKAB -Revenue: approximately US$3.2 billion (2025). Sweden’s LKAB is advancing fossil-free ironmaking through hydrogen-based direct reduction and its HYBRIT partnership with SSAB and Vattenfall. Its technologies aim to reduce iron production emissions and support sustainable steel manufacturing.

 

5. SSAB -Revenue: approximately US$9.5 billion (2025). SSAB is transforming steel production through hydrogen-reduced iron and electric arc furnaces. Its fossil-free steel initiatives aim to reduce reliance on coal-based processes and supply lower-emission steel to automotive, construction and other industrial sectors.

 

Conclusion

Green iron and decarbonised metals are reshaping the global mining industry as companies pursue lower emissions and sustainable growth. South Africa can leverage its mineral resources, renewable energy potential and emerging green hydrogen industry to develop competitive, value-added production. Global initiatives by HYBRIT, Fortescue, Rio Tinto and BHP demonstrate progress in hydrogen-based ironmaking and alternative processing technologies. However, widespread adoption depends on affordable clean energy, infrastructure investment, technological innovation and supportive policies. By addressing these challenges, South Africa and global miners can strengthen supply chains, reduce industrial emissions and create long-term economic opportunities in the transition towards sustainable metals production.