POSCO and BHP have signed a collaboration agreement to work on the commercial verification of POSCO's hydrogen-based ironmaking technology, HyREX. Under the agreement, POSCO will use BHP's iron ore to test how the technology performs under different raw material conditions. The focus is on understanding how ore characteristics affect the process and identifying suitable feed conditions for future commercial use. The agreement was signed on 3 September 2026 in Pohang, South Korea.
The collaboration is an important one because it brings together a steelmaker developing a new ironmaking process and one of the world's largest suppliers of iron ore. Hydrogen-based steelmaking technologies are often discussed in terms of replacing coal and reducing emissions, but the characteristics of the raw material going into the process are equally important. POSCO's plan is to test whether HyREX can operate reliably using BHP's iron ore and study how variations in ore quality influence process performance.
What is HyREX?
HyREX is POSCO's hydrogen reduction ironmaking technology. The basic idea is to use hydrogen as the reducing agent instead of coal, removing oxygen from iron ore before producing iron for steelmaking. This is different from the conventional blast furnace route, where coal plays a central role in the reduction process. POSCO is developing HyREX as part of its longer-term move towards lower-carbon steel production.
The technology is based on hydrogen reduction of iron ore fines through fluidized bed reactors, followed by melting of the reduced iron in an electric smelting furnace. One notable feature of the process is its focus on using iron ore fines directly rather than relying entirely on processed pellets. That makes the suitability of different types of iron ore an important part of the technology's development. The collaboration with BHP will therefore look closely at how Australian iron ore performs within this process.
BHP's iron ore will be tested
Under the agreement, POSCO will use BHP's iron ore for technology verification. The companies will examine how HyREX performs under different raw material conditions and how changes in iron ore characteristics and quality affect the process. The objective is to identify suitable raw material conditions as POSCO continues working towards commercialization of the technology.
This is important because a new steelmaking technology cannot be assessed only in laboratory conditions using a single type of feed material. Commercial steel plants need processes that can work with real-world variations in raw materials. Testing different ores can therefore help determine the flexibility of the technology and the conditions under which it operates most effectively. That appears to be one of the main practical objectives of the POSCO-BHP collaboration.
More than just a technology partnership
BHP has been supplying POSCO with iron ore, metallurgical coal and nickel, so the two companies already have an established commercial relationship. The latest agreement takes that relationship into the research and development side of steelmaking. Instead of only supplying raw materials for existing steelmaking routes, BHP will now participate in testing how its iron ore could be used in a potential next-generation process.
For BHP, this also provides an opportunity to assess the suitability of its iron ore for future low-carbon steelmaking technologies. As the steel industry experiments with new production routes, the type and quality of iron ore required could become an increasingly important question for mining companies. Not every process necessarily works in the same way with every type of ore. The testing programme could therefore provide useful information for both the steelmaker and the raw material supplier.
Scope 3 emissions are also part of the discussion
The companies have also said they will explore ways to reduce Scope 3 emissions associated with the raw material supply process. Scope 3 emissions generally cover indirect emissions across a company's wider value chain, making them particularly relevant for mining and steel companies that operate across large international supply networks. The agreement includes sharing technical knowledge related to raw materials for hydrogen-based ironmaking.
Reducing emissions from steel production is not only about changing what happens inside a steel plant. Mining, processing, transport and the movement of raw materials are also part of the broader supply chain. This makes cooperation between miners and steelmakers increasingly relevant as companies work on lower-carbon production routes. The POSCO-BHP agreement reflects this wider approach by including both process development and supply-chain considerations.
The agreement follows an earlier MoU
The new collaboration builds on a memorandum of understanding signed by POSCO and BHP in October 2025. That earlier understanding has now moved into a more specific agreement focused on HyREX technology verification. It shows how the relationship between the two companies is gradually moving from a broader intention to a defined research and testing programme.
POSCO has also been expanding its technology partnerships around HyREX. Before the BHP agreement, the company had entered into a technical collaboration with engineering company Primetals Technologies. The BHP partnership adds the raw material side to this effort, which is necessary if the technology is to move beyond development and eventually operate with commercially available iron ore.
Commercialisation is still the bigger challenge
The agreement should not be seen as an announcement that hydrogen-based steelmaking has already reached full commercial scale. The immediate work is focused on technology verification and testing. POSCO is still studying how HyREX performs with different raw materials and under conditions closer to actual industrial operations.
This testing stage is important because the shift from a working technology concept to a reliable commercial process is often where the biggest challenges emerge. Raw material consistency, energy availability, process stability and operating costs all become important once a technology moves towards industrial-scale use. The collaboration with BHP addresses one part of that larger challenge — understanding the relationship between the iron ore feed and the hydrogen-based process.
A closer link between mining and future steelmaking
The larger takeaway from this agreement is the growing involvement of mining companies in the development of new steelmaking technologies. Traditionally, a miner supplies iron ore and a steelmaker decides how to convert it into iron and steel. But future low-carbon technologies could require closer coordination between the characteristics of the ore and the design of the steelmaking process.
POSCO and BHP are now testing exactly that relationship through HyREX. The work is still at the technology verification stage, and there is no immediate commercial production announcement linked to the agreement. But if hydrogen-based ironmaking is to become commercially viable at scale, collaboration between ore suppliers and steelmakers will likely become more important than it has been in the conventional blast furnace era.