The South Korean steelmaker has signed a HyREX Collaboration Agreement with Australian mining giant BHP, bringing one of the world’s major iron ore suppliers directly into the process of validating its next-generation steelmaking technology.

Under the agreement signed in Pohang on Sept. 3, POSCO will use BHP iron ore to test the performance of HyREX under different raw material conditions.

The immediate news is a technology collaboration between a steelmaker and its raw material supplier. The bigger signal, however, is where HyREX is heading.

POSCO is beginning to address a question that comes after developing the technology itself: Can hydrogen-based ironmaking operate reliably with the iron ore that will actually be supplied to commercial steel plants?

From developing HyREX to testing the feedstock

HyREX replaces coal traditionally used in ironmaking with hydrogen as the reducing agent.

The process uses fluidized bed reactors to convert fine iron ore into direct reduced iron, or DRI, before melting it in an electric smelting furnace to produce hot metal. Unlike conventional shaft-based DRI processes that generally require iron ore to be pelletized, HyREX is designed to use fine iron ore directly.

That distinction makes the relationship with BHP particularly relevant.

Australia is one of the world’s largest suppliers of iron ore, and BHP’s Pilbara operations form an important part of that supply. The two companies had already agreed to conduct trials using BHP’s Pilbara iron ore at POSCO’s HyREX demonstration plant in Pohang.

The latest agreement takes that cooperation further.

POSCO plans to examine how differences in iron ore characteristics and quality affect HyREX performance and identify raw material conditions suitable for stable operation. BHP, in turn, will be able to test how its ore performs in an emerging low-carbon ironmaking route.

This matters because commercializing hydrogen-based steelmaking is not simply a matter of replacing coal with hydrogen.

The entire process — including the type of iron ore, its quality, reduction characteristics, hydrogen supply and downstream melting — has to work as an integrated system.

A raw material question is becoming a technology question

For decades, the relationship between steelmakers and mining companies was relatively straightforward: miners supplied iron ore and steelmakers processed it.

Decarbonization is beginning to blur that boundary.

As steelmakers develop new production routes, the characteristics of iron ore can determine which technologies are commercially viable. Mining companies therefore have an increasing incentive to participate much earlier in technology development.

For POSCO, collaboration with a major supplier provides access not only to raw materials but also to the technical knowledge needed to test HyREX against real supply conditions.

For BHP, the project provides an opportunity to determine how Australian iron ore can remain competitive as steelmakers shift toward lower-carbon production processes.

The partnership therefore represents something broader than an R&D agreement.

It connects steelmaking technology with the future raw material supply chain.

HyREX is moving closer to industrial reality

POSCO has been developing HyREX based partly on technology accumulated through FINEX, its existing ironmaking process that also uses fluidized bed reactors and fine iron ore.

At the same time, the company has been widening the group of global companies involved in the project.

POSCO entered into technology cooperation with engineering company Primetals Technologies in 2024. Bringing BHP into the development process extends that collaboration from engineering and process technology to the raw material side of the steelmaking value chain.

That changes the nature of the HyREX project.

It is gradually becoming less of a standalone POSCO technology project and more of an industrial ecosystem involving engineering, raw materials, energy and eventually commercial steel production.

Eom Kyung-keun, head of POSCO’s Research Institute, said the partnership is significant because a steelmaker and a global raw material supplier are preparing together for the future of low-carbon steelmaking. POSCO plans to expand cooperation with other global raw material suppliers as it accelerates development of low-carbon steelmaking technologies.

For BHP, the project provides an opportunity to establish a role for Australian iron ore in future steelmaking processes. For POSCO, it provides another piece of the infrastructure needed to move HyREX toward commercial use.

The Sept. 3 agreement therefore carries a signal beyond the partnership itself.

The race in hydrogen-based steelmaking is beginning to move from proving the process to proving the entire supply chain around it.

For POSCO, HyREX is entering that next phase.

Jung Jun-ho More by this reporter