Global mining company Rio Tinto has expressed doubts about the prospects for the development of green iron in Australia, Reuters reports.

The company cites a lack of economic incentives for the sector that would help decarbonize steel production.

«Today, I don’t believe there is an economic incentive for anyone to switch to hydrogen DRI,» said Rio Tinto’s chief technology officer Mark Davies during a press conference.

He also added that it is expensive to do this in Australia, it is an expensive place to build.

Australia is the world’s largest supplier of marine iron ore. However, its raw materials are of too low a quality to be directly processed into steel using renewable energy. Therefore, the country is also seeking to become a reliable source of green metals.

In particular, in February this year, Australia launched a new investment fund, Green Iron, worth A$1 billion ($636 million). It will promote the development of clean iron production and supply chains by supporting such projects and stimulating large-scale private investment.

Earlier, BHP expressed the opinion that it is too expensive for Australia to develop the green iron industry, and the investments will not pay off. This thesis was voiced by BHP Australia CEO Geraldine Slattery, who, along with other mining company CEOs, accompanied Prime Minister Anthony Albanese during his visit to China. Albanese said that the two countries should cooperate more closely in the field of green steel.