Western Australia’s environmental regulator has granted approval for the construction of a multi-billion-dollar hot briquetted iron (HBI) plant near Port Hedland, the state’s largest export hub.

The $4 billion Port Hedland Iron (PHI) project, backed by South Korean steelmaker POSCO, will refine raw iron ore from the Pilbara into hot briquetted iron, also known as briquetted steel, using the direct reduction process. The Environmental Protection Authority (EPA) has cleared the facility to produce up to two million tonnes of iron briquettes annually.

Port Hedland, the second-largest regional centre in the Pilbara, already plays a pivotal role in global supply chains, with the region providing about 40% of the world’s iron ore. Converting ore into HBI, a higher-value product, could significantly boost Australia’s export revenues. A recent report by the Superpower Institute suggested such a shift could more than double the nation’s iron ore export earnings.

Originally branded as the Port Hedland Green Steel Project, the plant is targeting full renewable energy use by 2050. POSCO has outlined plans to transition to 100% renewable energy by 2049. In the interim, however, operations will rely on natural gas, raising questions about the project’s environmental credentials.

University of Western Australia sustainable engineering researcher Bill Grace cautioned against labelling the development as “green”. He argued that the project’s viability hinged on securing a reliable green hydrogen supply, which has proven challenging in the region.

The uncertainty is underscored by recent setbacks in Australia’s hydrogen sector, with several large-scale projects in the Pilbara abandoned by investors in recent months. Without a clear pathway to affordable renewable hydrogen, experts remain sceptical of PHI’s long-term green ambitions.

Nevertheless, the EPA’s approval marks an important step for the project, which has the potential to reshape Australia’s iron industry by moving further down the value chain. If successful, the plant could support the global steel sector’s shift towards lower-carbon production, while also creating new export opportunities for Australia.

The debate over its “green” credentials, however, highlights the broader challenge of decarbonising heavy industries, where the transition to renewable-powered hydrogen remains technically and economically complex.

Source:

https://www.abc.net.au/news/2025-08-19/green-hot-briquetted-iron-project-environmental-approval/105666950