Global mining giant BHP announced on Friday that it has kicked off a commercial-scale direct reduced iron production project with China Baowu Steel Group Corporation to support steelmaking decarbonization development in China.

The project, which will utilize BHP iron ores in blends to produce direct reduced iron at Baowu Zhanjiang's newly commissioned direct reduced iron plant, is aimed at supporting the wider use of the direct reduction technology to accelerate the greenhouse gas emission reduction from steelmaking, said BHP.

The direct reduced iron plant uses hydrogen, natural gas and other hydrogen-rich gases as reducing agents to convert iron ores into a metallic iron product that is further refined for steel. The process can potentially reduce the steelmaking greenhouse gas emissions to a large extent, it said.

"This project represents a significant step forward in our joint commitment to climate change collaboration and China Baowu has been a crucial strategic partner for BHP with long-term collaborations across various domains," said Ben Ellis, BHP's vice-president of marketing sustainability.

BHP and China Baowu signed a MoU to strengthen their cooperation in climate change initiatives in 2020. As part of this agreement, BHP is committed to investing up to $35 million over five years to support China Baowu's R&D and trials in greenhouse gas emission reduction in steelmaking process.

According to China Baowu, the direct reduction process holds enormous potential for greenhouse gas emission reduction.

The commissioning of China's first million-ton direct reduced iron plant in Zhanjiang represents a solid step toward sustainable low-carbon development. This collaboration provides robust support for advancing this technology and contributing to the low-carbon development of the steel industry, it said.