Company Interview / Calix and Rio's $35m green steel deal

Key Points:

Rio Tinto invests $35 million in Calix’s zero emission steel demonstration plant (ASX:CXL, ASX:RIO) Zesty technology targets green iron and steel with low to zero carbon emissions Demonstration facility will operate under a tolling arrangement with industry players Commercial rollout expected after 2028, supported by technology sublicensing agreement

Calix managing director Phil Hodgson outlines the strategic partnership between Calix (ASX:CXL) and Rio Tinto (ASX:RIO) to develop a demonstration plant in Western Australia for zero emission steel technology, known as Zesty. This collaboration sees Rio Tinto contributing $35 million to accelerate the construction and advancement of the Zesty green iron demonstration plant at Kwinana. Hodgson explains that Zesty stands for Zero Emissions Steel Technology and utilises Calix’s core kiln technology, already being deployed across sectors including lime, cement, and alumina.

Hodgson describes green iron and steel as being produced with minimal or no carbon emissions, using renewable energy sources rather than traditional blast furnace methods reliant on coal. The demonstration plant, backed by $44.9 million in Australian Renewable Energy Agency (ARENA) funding, will allow for full-scale validation of hydrogen direct reduced iron processes and create opportunities for tolling arrangements where various iron ore players can test their ores.

A key aspect of the partnership involves Rio Tinto’s iron ore being processed through the facility, establishing an important precedent for green steel production in Australia. The agreement also provides for future licensing, allowing Rio Tinto to sublicense the technology to its global customer base, with commercial-scale constructions targeted to follow the demonstration plant’s commissioning in 2028.