BHP has quietly abandoned plans for an iron ore processing facility in Western Australia's Pilbara region that would have drastically cut emissions, despite internal documents rating the project as having 'excellent social value' and being 'well-aligned' with its climate strategy.
Project Details and Benefits
In 2025, the mining giant was well advanced in its plans to build a beneficiation plant near its Jimblebar open-cut mine. The facility would have significantly improved the purity and quality of its iron ore, a product increasingly sought by steelmakers worldwide, particularly in China, where government pressure is driving emissions reductions.
Using higher quality iron ore is one of the most cost-effective ways for steelmakers to lower their carbon footprint. The Jimblebar facility appeared to be a win-win for BHP: it could charge a premium for the improved ore while the project itself had a positive return on investment.
Internally, BHP estimated the project would reduce scope-three emissions—those released by its customers—by 1.7 million tonnes per year, equivalent to taking more than 350,000 cars off the road. This reduction is roughly three-quarters of the annual emissions from BHP's entire Western Australian iron ore division, including mines, trucking fleets, and power generation.
Decision to Cancel
In June 2025, internal documents show the company quietly shelved the project, cancelling all further work. BHP determined that the plant had marginal economics and would struggle to compete for capital with other projects.
The cancellation is the latest example of BHP either shelving or delaying major emissions-reducing initiatives. An exclusive investigation based on leaked documents reveals that the mining giant has also put on ice a 50-megawatt solar and 20MW battery project in the Pilbara, despite board approval, and significantly delayed an almost 500MW system of solar, wind, and battery storage.
Meanwhile, BHP has continued acquiring polluting diesel trucks for its Pilbara operations, despite pledges to electrify the fleet, and has war-gamed options to delay major investments needed to meet its net-zero-by-2050 goal.
Industry and Regulatory Context
The revelations raise serious questions about the effectiveness of Australia's safeguard mechanism, the federal government's key climate policy for large industrial emitters. The mechanism requires facilities emitting over 100,000 tonnes of CO2 equivalent annually to reduce emissions intensity by up to 4.9% per year, either through direct cuts or carbon offsets.
Chinese steelmakers are under significant pressure to reduce emissions. Last year, China expanded its national emissions trading scheme to include steel production and announced requirements for increased use of green energy. Additionally, the European Union's carbon border adjustment mechanism is raising costs for emissions-intensive Chinese steel, making green steel more affordable for European customers.
Prof Christoph Nedopil, an economist at the University of Queensland, said Chinese steel mills are now seeking greener sources of iron. 'Without meeting a growing green iron demand from China, Australian ore producers either have to substitute their Chinese markets with other markets, accept lower prices or reduce production,' he said. 'Beneficiation plants in Australia can provide higher grade iron ore that would then require less energy and emissions to make into iron and then steel.'
Broader Decarbonisation Strategy
Prof Yansong Shen, a green metals expert at the University of New South Wales, said beneficiation plants like the one proposed at Jimblebar were strategically important for reducing emissions in iron and steelmaking. He noted that beneficiation is a practical and comparatively low-risk option, though it adds capital cost, energy consumption, water demands, and operational complexity to the supply chain.
'In the current market, there is growing commercial pressure for higher-grade ores because steelmakers are under increasing decarbonisation pressure,' Shen said. 'This is improving the economic attractiveness of beneficiation projects globally. But beneficiation should not be viewed as a standalone solution—it is best understood as part of a broader decarbonisation strategy combining ore quality improvement, process efficiency, renewable energy, and eventually low-carbon ironmaking technologies.'
However, Nedopil cautioned that beneficiation plants pose environmental risks, including significant water use in the water-scarce Pilbara and challenges in managing tailings storage.
BHP's Response
In a statement, BHP did not specifically address questions about the Jimblebar plant but said it has made significant progress on its scope-one and scope-two emission reduction targets. The company spent US$60 million on reducing potential scope-three emissions in 2024-25 and collaborated with 11 steel producers representing 22% of global steel production. BHP is also assessing other ways to reduce steelmaking emissions, including blast furnace abatement, carbon capture pathways, and electric smelting furnaces.
