Rio Tinto Commits $35M to Calix’s Zesty Green Iron Plant in WA
Calix Limited has secured a pivotal $35 million joint development agreement with Rio Tinto to advance its Zesty Green Iron Demonstration Plant in Western Australia, backed by a substantial ARENA grant. This collaboration aims to pioneer low-emission steel production using innovative hydrogen and electric heating technology.
- Joint Development Agreement with Rio Tinto valued over $35 million
- Zesty Demonstration Plant to produce up to 30,000 tonnes of green iron annually
- Rio Tinto to provide $8 million cash plus significant in-kind support
- Project supported by $44.9 million ARENA grant contingent on matched funding
- Potential for Rio Tinto equity participation and global licensing of Zesty technology
A Landmark Partnership in Green Steel
Calix Limited, an Australian environmental technology innovator, has taken a significant step forward in the race to decarbonise the steel industry by signing a Joint Development Agreement (JDA) with mining giant Rio Tinto. The agreement, valued at over $35 million in cash and in-kind contributions, will support the development and commercialisation of Calix’s Zesty Green Iron Demonstration Plant in Kwinana, Western Australia.
This collaboration is not just a financial boost; it represents a strategic alliance between a technology pioneer and one of the world’s largest iron ore producers. Rio Tinto’s involvement brings not only capital but also technical expertise, access to critical infrastructure, and a pathway to market through its global customer base.
The Zesty Technology and Its Promise
The Zesty technology combines electric heating with hydrogen reduction to produce green iron, a precursor to green steel, with a focus on minimising hydrogen use and enabling flexible operation with renewable energy. The demonstration plant aims to produce up to 30,000 tonnes per year of hydrogen direct reduced iron or hot briquetted iron, using a variety of iron ore grades, including lower-quality fines that traditionally pose processing challenges.
Calix’s approach could offer a more cost-effective and scalable pathway to low-emission steelmaking, addressing a sector responsible for approximately 8% of global CO2 emissions. The project’s location in Kwinana benefits from proximity to the NeoSmelt Project and established industrial infrastructure, positioning it well within Australia’s emerging green steel ecosystem.
Funding and Commercialisation Pathways
Rio Tinto’s $8 million cash contribution will be delivered in two tranches, contingent on project milestones and due diligence, complemented by in-kind support such as site provision, engineering services, and ore supply for commissioning. This funding is critical to unlocking a $44.9 million grant from the Australian Renewable Energy Agency (ARENA), which requires matched funding to proceed.
Beyond immediate project support, the JDA outlines Rio Tinto’s option to take equity in a Zesty subsidiary and to license the technology globally under a non-exclusive, perpetual agreement. This arrangement could accelerate the adoption of Zesty technology across Rio Tinto’s extensive network, amplifying its impact on global steel decarbonisation efforts.
Industry and Government Endorsement
The partnership has garnered strong endorsements from key stakeholders. Calix’s CEO Phil Hodgson highlighted the validation the agreement provides for Zesty’s potential to transform steelmaking and support Australia’s export economy. Rio Tinto’s Iron Ore CEO Matthew Holcz emphasised the importance of low-emissions steel in global decarbonisation and the role Pilbara iron ores can play.
Western Australian Premier Roger Cook and ARENA’s General Manager for Heavy Industry, Jody Herley, also praised the project’s alignment with regional economic diversification and climate goals, underscoring the collaborative effort between industry, government, and innovation to drive sustainable heavy industry transformation.
Looking Ahead
The Zesty Demonstration Project is currently in detailed design engineering, with a Final Investment Decision expected in 2026. Success here could position Calix and Rio Tinto at the forefront of a burgeoning green steel market, potentially reshaping the future of one of the world’s most carbon-intensive industries.
Bottom Line?
As Calix and Rio Tinto advance the Zesty project, the steel industry’s low-carbon future inches closer, but key milestones remain before commercial reality.
Questions in the middle?
- Will Rio Tinto convert its cash contribution into equity in the Zesty subsidiary?
- How quickly can the demonstration plant achieve its production targets post-FID?
- What are the terms and potential market reach of the global licensing agreement for Zesty technology?
