On 21 September 2026, BHP and China Baowu Steel Group announced a renewed five-year memorandum of understanding on steel decarbonisation. The significance of the announcement lies less in the document itself than in the work completed during the previous five years.
Since 2020, the two companies have collaborated on lower-emissions iron and steelmaking pathways. One notable milestone was the trial of BHP’s Pilbara ores in China Baowu’s one-million-tonne-per-year hydrogen-based direct reduced iron furnace. BHP reported that the trial produced iron at around half the carbon dioxide intensity of blast-furnace-based metal. The resulting material also supported pilot-scale electric smelting furnace tests that demonstrated the technical potential for a near-zero-emissions steelmaking pathway under the stated assessment boundary.
The partnership now enters a further five-year phase. Its priorities include modified blast-furnace technologies, continued direct-reduction trials and subsequent processing through a planned demonstration electric smelting furnace.
This is an encouraging industrial story. It shows how a mining company and a steelmaker can move beyond a conventional supplier-customer relationship and work together on the way raw materials, process technology and operating infrastructure interact.
The collaboration started with a shared industrial problem
Steel decarbonisation cannot be solved by changing one machine in isolation. Iron ore grade, gangue chemistry, pellet quality, reduction behaviour, energy supply, furnace design and downstream melting all influence the result.
For an iron ore producer, the question is how its products will perform in emerging lower-emissions processes. For a steelmaker, the question is how new technologies can be introduced without losing productivity, quality, safety or commercial competitiveness.
BHP and China Baowu brought complementary capabilities to the same problem. BHP contributed ore knowledge, product expertise and a global view of future steelmaking requirements. China Baowu contributed metallurgical capability, operating experience and access to industrial-scale facilities. Their shared objective created a reason to conduct work that neither party could reproduce as effectively alone.
This is a useful lesson for mining technology providers. Strong international collaboration rarely begins with the statement, “Here is our product.” It more often begins with a better question: “Which operating problem can we solve together, and what evidence would both parties accept as progress?”
Real industrial infrastructure turned research into learning
The use of a one-million-tonne-per-year hydrogen-based direct-reduction furnace matters because industrial learning is different from laboratory promise. At industrial scale, ore properties interact with material preparation, gas flow, thermal behaviour, process control, product handling and downstream operations.
Access to a real facility allows the partners to identify constraints that may remain invisible in a small test. It also brings production, maintenance, safety and management teams into the development process. That broad participation helps convert a technical concept into an operating pathway.
The reported result—iron produced at around 50% of the carbon dioxide intensity of blast-furnace-based metal—is positive. It should be read in its proper context: it is a significant trial outcome under a defined boundary, not proof that every plant, ore blend or energy system will reproduce the same result.
That distinction does not diminish the achievement. It clarifies why the next stage of work is valuable.
A staged pathway made continued investment possible
The partnership illustrates a practical progression:
shared research → feedstock and process trials → industrial-scale direct reduction → downstream smelting assessment → expanded demonstration programme
Each stage generates information needed for the next decision. The partners do not need to claim that every technical and economic question has already been resolved. They need to show that the programme is producing enough useful learning to justify the next level of collaboration.
The decision to renew the partnership for another five years is therefore an important commercial signal. It indicates that both organisations see continuing value in the relationship, the knowledge created and the route ahead.
For equipment and technology companies, this offers an alternative to the “one demonstration, then immediate global sales” mindset. A credible programme can define a sequence of gates: laboratory work, pilot validation, industrial trials, operating optimisation and commercial deployment. Success at each gate earns the right to proceed.
China’s role is moving beyond manufacturing
The case also presents a positive picture of China’s place in global mining and metallurgical innovation.
China Baowu is not simply receiving overseas raw materials or purchasing imported technology. It is contributing industrial assets, metallurgical expertise, operating teams and research capacity to a jointly defined challenge. The China Baowu–Monash University–BHP Industry Knowledge Centre for Low Carbon Metallurgy extends that collaboration into research and capability development.
This broader role is relevant to Chinese mining equipment and technology companies. Internationalisation can progress through several levels:
- exporting a manufactured product;
- adapting the product to a local duty;
- participating in an industrial trial;
- jointly developing a solution with the owner;
- helping create methods, operating knowledge and standards that can be applied more widely.
The higher levels create deeper customer relationships because the provider is no longer competing only on price or specifications. It is contributing to the customer’s ability to solve a strategic problem.
Five practices worth adapting
The partnership suggests five practical principles for companies seeking international co-development opportunities.
Start with the customer’s strategic problem. Frame the offer around productivity, recovery, decarbonisation, water, safety or reliability—not around a product catalogue.
Bring complementary capabilities together. A technology developer may need an operator, engineering partner, research institution, local service organisation or data specialist to form a credible programme.
Use real operating conditions. Laboratory evidence is important, but industrial infrastructure exposes the interactions that determine whether a technology can be adopted.
Define staged decisions. Agree what each test must establish, who confirms the result and what evidence is required before expanding the programme.
Build knowledge and people, not only hardware. Training, joint technical teams, data governance and research partnerships help a project survive beyond its first installation.
NOVEXA MINING perspective
The BHP–China Baowu programme does not yet demonstrate universal commercial deployment of a near-zero-emissions steel route. Important questions concerning capital requirements, energy availability, operating cost, feed flexibility and full-scale integration remain part of the next phase.
Its achievement is nevertheless substantial. A five-year relationship has generated industrial trial experience, a quantified emissions result under the reported boundary, further smelting work and sufficient mutual confidence to support another five years of collaboration.
For capable Chinese mining technology providers, the message is encouraging. Global market access does not have to begin and end with an equipment sale. It can be built by identifying a meaningful customer problem, forming the right partnership, validating the solution in stages and remaining involved as operating knowledge grows.
NOVEXA MINING helps mine operators and technology providers structure that journey—from opportunity definition and partner alignment to trial design, local delivery and lifecycle support. Our role is independent, manufacturer-neutral and execution-led.
The next chapter of Chinese mining technology overseas will not be written only on nameplates. It will be written in the industrial problems that Chinese companies help global customers solve together.
Source and independence statement
Source: BHP, *BHP and China Baowu renew steel decarbonisation partnership*, 21 September 2026.
This article is based on publicly disclosed information. NOVEXA MINING has no agency, joint-marketing or endorsement relationship with BHP, China Baowu or Monash University arising from this publication. The reported trial result applies to its stated assessment boundary and should not be interpreted as universal commercial performance. This article does not constitute engineering, procurement, investment or emissions-certification advice.