Metso’s DRI Smelting Furnace: What the 2026 Milestones Actually Show

For decades, the steel industry has treated a hard chemical fact as a fixed wall: most of the world’s iron ore is simply too dirty for hydrogen-based direct reduction. The gangue content, the silica and alumina that ride along with the iron, sits too high. That has locked out enormous reserves, including much of Australia’s Pilbara, from the very steelmaking route being promoted as the future.

That matters more now than at any point before. Blast furnaces still dominate primary steelmaking, and they are among the heaviest emitters in heavy industry. Direct reduced iron paired with an electric arc furnace, running on hydrogen, is the leading low-carbon alternative, but its appetite for high-grade ore has created a supply problem that could cap how far the route can scale.

Metso’s DRI Smelting Furnace is pitched directly at that bottleneck. And in September 2026, two separate events landed in the same month to suggest it works at meaningful scale.

Here is what those milestones actually demonstrate, how the technology solves the ore-quality problem in engineering terms, and what still has to fall into place before this becomes a mainstream decarbonisation pathway rather than a promising one.

Why conventional DRI cannot use most of the world’s iron ore

It is tempting to assume direct reduced iron (DRI) is just a cleaner cousin of the blast furnace, capable of eating the same feedstock with fewer emissions. The opposite is true. Conventional DRI is fussier about its ore, not less.

Standard DRI processes, whether shaft furnace or fluidised bed, need iron ore with iron content at or above 67% Fe and acid gangue (SiO₂ plus Al₂O₃) below 2%, according to Metso’s DRI brochures. The reason is structural: in the DRI-EAF route, gangue travels with the reduced iron into the electric arc furnace, where it drags down steelmaking efficiency.

The threshold that conventional DRI enforces is not arbitrary: direct reduction grade iron ore specifications emerged from the metallurgical reality that gangue reporting to an electric arc furnace degrades efficiency in ways a liquid bath can absorb but a solid-state reduction step cannot.

A blast furnace has no such problem. It tolerates ore below 67% Fe with gangue above 5%, because separating metal from slag in a liquid bath is precisely what it was built to do.

That inversion is the whole story. The world’s most abundant iron ore does not clear the DRI bar.

• Pilbara iron ore typically carries iron content around or below 60% Fe, well short of the conventional DRI threshold.
• Its gangue levels run high, disqualifying it from the shaft furnace and fluidised bed routes.
• That combination makes it a natural blast furnace feed but a poor match for the DRI-EAF pathway the industry is leaning on to decarbonise.

The implication is uncomfortable. The most scalable hydrogen-DRI route has an ore-quality ceiling that excludes the majority of readily available iron ore on the planet, which means the transition is far more geographically constrained than most coverage admits.

How Metso’s DRI Smelting Furnace actually works

The conceptual breakthrough is simpler than the engineering that delivers it: split reduction from smelting into two separate steps.

In the first step, iron ore is reduced in the solid state. Depending on the application, that happens either in a hydrogen-based Circored fluidised bed or in an SL/RN rotary kiln. The output is DRI. In the second step, that DRI is fed hot into an electric smelting furnace, where the high-temperature liquid separation happens.

That separation is not a convenience. It is the reason the whole system can accept lower-grade ore. By handling gangue removal in a purpose-built liquid bath rather than trying to keep gangue out of the process entirely, the furnace does the job a blast furnace does, without coke.

The process runs in a clear sequence:

1. Prepare the ore, including characterisation and beneficiation to match the furnace’s operating window.
2. Reduce the ore in the solid state, using either the Circored fluidised bed (hydrogen-based) or the SL/RN Xtra rotary kiln.
3. Feed the hot DRI directly into the electric smelting furnace.
4. Add fluxes, maintain the molten bath, and separate liquid iron from slag.

Now the furnace itself. It is a high-power electric smelting unit rated up to 115 MVA apparent power and 110 MW design power, using a rectangular six-in-line electrode arrangement to hold a molten bath. DRI is charged in, fluxes are added, and liquid iron and slag part company. Metso also offers a Metallurgical Digital Twin tool to optimise operation through real-time and predictive scenarios.

The design target is where the differentiation becomes concrete.

According to the AusIMM paper “Fluxing options and slag operating window for Metso’s DRI smelting furnace,” the furnace is designed to process blast-furnace-grade concentrate, typically with less than 67% Fe and gangue content greater than 5%.

That is the exact ore specification conventional DRI rejects. What this tells you is that the two-stage design is not an incremental tweak. It is the structural reason the technology can accept the ores that would otherwise be shut out of green steelmaking.

The slag chemistry that makes high-gangue ores viable

The mechanism at the heart of it is fluxing. Operators add fluxes to control the slag’s viscosity and composition, so that gangue is absorbed into a fluid slag phase and separated as a liquid rather than contaminating the hot metal.

Get the slag chemistry right and impurities leave with the slag while the hot metal stays within acceptable quality limits.

The AusIMM paper is candid that this is process-window sensitive. Maintaining hot metal quality across a range of ore inputs demands careful fluxing, robust ore characterisation, and beneficiation. The technology is not indifferent to what you feed it, but its window is far wider than conventional DRI allows.

With that, the Metso column of the comparison completes.

Two milestones in September 2026: pilot proof and first commercial order

In September 2026, Metso’s DRI Smelting Furnace crossed two distinct thresholds at once. One was independent pilot validation under industrial conditions. The other was a paying customer with a specific plant application. Together they mark the shift from engineered concept to commercially available product, and the fact that both landed in the same month is what makes the signal worth reading closely.

Christmas Creek, Pilbara, Western Australia

The pilot sits at Fortescue’s Christmas Creek Green Metal Project in the Pilbara, the exact region whose ore conventional DRI cannot use. That is the point of the trial: to test whether lower-grade Pilbara fines can move through a hydrogen-based reduction and electric smelting chain and come out as hot metal.

On 28 September 2026, Metso confirmed the project had produced first hot metal using its electric DRI Smelting Furnace. Installation had commenced in September 2025, giving a roughly one-year path from equipment on site to production milestone.

The production of first hot metal at Christmas Creek is the milestone that separates a working laboratory concept from an industrially validated process: it means the full chain, ore feed, hydrogen reduction, electric smelting, and liquid iron output, completed a cycle under real site conditions rather than modelled ones.

The project is designed as an integrated, renewable-powered chain, using clean energy for the hydrogen-based reduction and the electric smelting stage. “First hot metal” is the moment a process proves it can actually produce liquid iron, the foundational output for downstream steelmaking.

Metso Minerals President Piia Karhu highlighted that the Christmas Creek results demonstrate the technology’s capacity to advance reduced-emission ironmaking.

For a reader trying to gauge whether the ore-quality claim is real, this is the operational proof: high-gangue Pilbara ore, run through the furnace, yielding hot metal.

Eti Bakir’s Mazidagi plant, Türkiye

The commercial signal came earlier in the month. On 7 September 2026, Metso announced an order worth approximately EUR 55 million from Eti Bakir for the Mazidagi plant in Mardin Province, Türkiye, booked in the Minerals segment for Q3 2026. Metso describes it explicitly as the first commercial-scale delivery of the DRI Smelting Furnace.

The unit is a 30 MVA furnace paired with an SL/RN Xtra rotary kiln. The scope of supply covers:

• Basic and equipment engineering
• Supply and advisory services for the SL/RN Xtra rotary kiln pellet direct reduction process
• Integration with the 30 MVA DRI Smelting Furnace, including a hot feeding system

Here is the interpretive twist. Eti Bakir is not buying the furnace to process primary ore. It plans to convert leach residues from existing operations into molten hot metal, as part of a zero-waste concept at Mazidagi. Metso has supplied the site before, across beneficiation, calcination, off-gas cleaning, sulfuric acid, and metal recovery leaching plants.

What that tells you is that the technology’s first paying customer found value not in the ore-quality differentiation that anchors the sales pitch, but in the furnace’s ability to monetise a waste stream. It broadens where this technology might find its earliest markets, well beyond primary iron ore.

What stands between a first commercial order and a mainstream decarbonisation route

The easy mistake is to read the barriers as a checklist of separate obstacles. They are not. Hydrogen cost, electricity supply, ore quality, and policy form a system of dependencies, where a weak link in any one drags on the others.

• Hydrogen supply and cost. The upstream reduction step assumes large volumes of low-carbon hydrogen. IEEFA’s June 2026 report “DRI smelters: promise, progress and barriers” identifies hydrogen availability and cost as a critical bottleneck, one that can erode the economic case for the whole route where renewable electricity is expensive or grid decarbonisation is incomplete.
• Electricity infrastructure. At up to 115 MVA and 110 MW design power, these furnaces are high-instantaneous-demand assets. Scaling them requires not just low-carbon generation but grid infrastructure able to deliver heavy-industry-grade power, which many regions simply lack.
• Technology maturity. IEEFA categorises DRI smelters as early-stage relative to decades of blast furnace operation. Metso itself calls the Eti Bakir order the first commercial-scale delivery, which means the operating experience base is still being built, with the usual first-of-a-kind risks around ramp-up, availability, and unforeseen maintenance.
• Competing routes. Blast furnace retrofits with carbon capture, utilisation and storage (CCUS), and expanded scrap-based electric arc furnace production, both lean on familiar assets and existing infrastructure. In regions where ore quality is not the binding constraint, steelmakers may prefer them.

The AusIMM paper adds a technical caveat that feeds straight back into this system: the furnace’s slag operating window is sensitive, and stable operation depends on robust ore characterisation and beneficiation. That is another input that has to be assembled alongside hydrogen and power.

IEEFA characterises DRI smelters as a promising but early-stage route that can alleviate ore-quality constraints, if the technical and economic barriers are overcome.

Precedents in the wider hydrogen-DRI space, including projects that have cited multi-gigawatt renewable build-out and complex financing as hurdles, reinforce the point. The core question is not really whether the furnace works. September 2026 suggests it does. The harder question is whether hydrogen supply, grid capacity, and policy support can be assembled in the same place at the same time.

What the Metso milestones tell us, and what they do not yet settle

Strip away both the press-release optimism and the reflexive scepticism, and September 2026 established two concrete things.

Christmas Creek showed the DRI Smelting Furnace can produce hot metal from high-gangue Pilbara ore under real operating conditions. Eti Bakir showed a real industrial customer will commit roughly EUR 55 million to the first commercial-scale deployment, even if that first application is waste valorisation rather than primary ore.

Both are validation. Neither is proof of mainstream readiness. Three variables will decide the trajectory from here, and they are worth tracking as watch points rather than dismissing as barriers:

• Hydrogen cost trajectory. How fast low-carbon hydrogen becomes cheap and abundant enough to make the upstream reduction step economic.
• Grid infrastructure pace. How quickly low-carbon grid capacity gets built in iron-ore-rich or steel-producing regions, given the furnace’s heavy power draw.
• Policy demand-side pull. Whether border carbon adjustments, green steel premium off-take contracts, and emissions rules generate enough demand to justify final investment decisions.

Green steel demand in Europe is the most concrete source of the policy pull the technology needs: the EU Carbon Border Adjustment Mechanism creates a direct cost penalty for high-emission imports, and off-take commitments from European manufacturers are among the earliest signals that the premium market for low-carbon hot metal is real rather than theoretical.

Public roadmaps from bodies including the International Energy Agency and the World Steel Association treat this as one of several parallel decarbonisation pathways, promising but contingent on the surrounding system.

For readers wanting to map the Metso technology against the full landscape of competing low-carbon routes, our dedicated guide to hydrogen-based green steel production covers the leading shaft furnace, fluidised bed, and smelting approaches side by side, including their ore requirements, cost structures, and commercial readiness as of 2026.

The most important read for you is this. The ore-quality unlock is real. If the system barriers resolve, the DRI Smelting Furnace addresses the geographic constraint that would otherwise limit hydrogen-DRI steelmaking to a handful of high-grade ore regions. The larger prize is not the ore that already qualifies. It is the vast pool of reserves that green steelmaking has so far had to leave on the table.

This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions. These statements are speculative and subject to change based on market developments and company performance.