Australia is accelerating efforts to lead the global transition to green iron, combining rich ore reserves with a new wave of government backing and industrial innovation.

In September 2025 the federal government launched a A$500 million grant program under its Green Iron Investment Fund, signalling a strategic shift from raw ore export toward value-added low-emission iron production.

The move is backed by industry and environmental advocates, who argue that Australia’s abundant iron ore, vast renewable energy potential and established mining infrastructure make it uniquely equipped to produce iron using green hydrogen and export-ready low-carbon feedstock.

Analysts note that transforming iron ore into green iron domestically — rather than simply shipping raw materials — offers Australia a rare opportunity to capture more economic value across the supply chain while aligning with global decarbonisation trends.

Yet technical and market challenges remain.

Much of Australia’s existing supply is low- to mid-grade ore, which traditional decarbonised steel pathways — such as direct-reduced iron (DRI) combined with electric-arc furnace (EAF) processing — require higher-grade ore.

Experts say Australia must simultaneously pursue two tracks: develop new magnetite mines to yield high-grade iron ore and deploy emerging technologies enabling low-carbon production from existing ores.

Several industry leaders have already taken steps.

The mining company Fortescue, for example, is building a demonstration plant designed to convert its Pilbara iron ore into green iron and expects to ship first output as early as 2026. Meanwhile, research institutions and green-metal start-ups are advancing hydrogen-based and renewable-electricity smelting technologies.

Government policies under the “Future Made in Australia” framework — including incentives, grants and regulatory support — are helping reduce barriers for early-stage projects.

If Australia succeeds in scaling domestic green iron production, it could shift from being the world’s leading iron-ore exporter to becoming a cornerstone supplier of green iron — potentially supplying export markets in Asia and beyond.

That would deliver both economic gains and a meaningful contribution to emissions-reduction efforts in the global steel industry.

For now, time is of the essence: with global demand for green iron rising, Australia must quickly align investments, technology and policy to avoid being overtaken by international competitors already advancing low-carbon steel production.

The ambition is clear: Australia aims not just to supply raw materials, but to help define the future of steel — and ensure that the next generation of iron is as green as it is strong.