Solar PV and Australia’s green metals opportunity

For context, the Australian Treasury has previously stated that the Australian mining industry is the world’s largest exporter of minerals and metals. In 2024, Australia’s mining sector, including equipment, technology and services, contributed 14.3% to the nation’s GDP, employed 300,000 people directly and created 1.1 million jobs overall. This makes it a stalwart of the Australian economy.

Mining will play a crucial role in Australia’s and the world’s energy transition. With its rich mineral resources, the country’s mining sector has significant potential to positively influence this transition and capitalise on the economic opportunity.

Indeed, this is outlined in national science agency CSIRO’s latest Critical Energy Materials roadmap, which projects that by 2050, the annual demand for metals and minerals will surpass 700 million tonnes. This includes nearly 9 million tonnes of lithium used in energy storage, over 130 million tonnes each of silicon, essential for electric vehicles, and copper, required for wind turbines and batteries. Additionally, 48 million tonnes of nickel will be needed for batteries.

However, despite the economic opportunity for Australia’s mining sector, it is still a major polluter and as such must embrace renewable energy to decarbonise its operations and extract ‘green metals’—another possibly lucrative opportunity.

Solar PV could play a vital role in this and is currently being explored. Over the last year, many mining companies have been considering solar to decarbonise their operations. These include the British-Australian multinational mining company Rio Tinto and Australian mining giant Fortescue Metals Group.

Solar’s role in a ‘once-in-a-generation’ economic opportunity

According to a spokesperson for Fortescue Metals Group, producing green iron metal presents a “once in-a-generation economic opportunity for Australia to use its abundant iron ore and renewable energy resources to build what could be Australia’s largest ever single industry, generating billions of dollars annually and creating thousands of highly paid jobs for generations of Western Australians”.

To help promote the production of green iron metal, Fortescue has been turning its attention to solar PV. Although solar energy is not explicitly used to extract ore, it does play a complementary role by decarbonising the company’s operations.

Solar can power various stages of metal production, from mining and smelting to refining and manufacturing, reducing greenhouse gas emissions and promoting a circular economy.

Solar PV can also produce green hydrogen, which is then used in a reduction furnace to convert iron ore into sponge iron, which is further processed in an electric smelting furnace (ESF) to produce high-purity green iron metal (see box at the end of this section). Similarly, solar energy can produce green aluminium and green zinc, among other metals.

Tony Wood, director of the energy programme at the Australian think tank Grattan Institute, says solar PV can be used on-site to support decarbonising the metals production method.

“The specific process flow varies with the mineral’s chemical composition and the purification process steps. Green electricity can power the electrical parts of the process and produce green hydrogen, which can be used to reduce (separate oxygen from the metal oxide in the mineral) part. Solar PV can be on site,” Wood says.

In terms of real-world applications of solar PV in mining, Fortescue has been exploring the use of solar PV in these processes in Western Australia.

“Fortescue has been integrating solar power into our mining operations for over two years. We recently introduced new solar capacity as part of our journey towards ‘real zero emissions’ with the commissioning of a 100MW solar PV plant, North Star Junction,” the spokesperson for Fortescue says.

Although PV is set to play an integral role in Fortescue’s plans to produce green metals, it is not without its difficulties. Solar’s variable generation profile can result in a large influx of power during specific periods of the day, which needs to be carefully managed.

“To address this, we are designing and implementing a grid control and stability system tailored to renewable energy, ensuring that we can effectively manage this variability. In the Pilbara, solar and wind energy complement each other well. We will rely on it to flatten out the generation profile. We will store solar energy during the day and will use it to supplement wind generation at night, creating a more balanced and reliable energy supply,” the Fortescue spokesperson explains.

Pilbara is a region in Western Australia famed for its rich natural minerals. As a result, it has morphed into the heart of the state’s mining operations. The region is rich in iron ore, gold, nickel and copper. Mining giants Rio Tinto and BHP own a network of 17 iron ore mines in the region.

Wood also sees the variable generation of solar PV as an obstacle. Wood believes the use of solar PV over wind could be more cost-effective.

“The biggest challenge when using solar PV to support the green metals process is the intermittency of renewables. On-site solar may be more cost-eective than gridbased renewable electricity,” Wood says.

“Depending on location in Australia, solar could be more predictable than wind. It may also partner with wind to reduce exposure to intermittent technologies. The location and nature of the processing will determine the relative value of either technology.

Fortescue: the process of producing green iron using hydrogen

The process of producing green iron metal from Australian Pilbara iron ore using a hydrogen-based technology pathway can be broken down into four key steps:

1. Preparation of iron ore: The first step involves preparing the iron ore through physical processing methods such as crushing, beneficiation, and agglomeration. This ensures the ore is ready for the reduction process.
2. Reduction and metallisation: Next, the prepared ore and hydrogen are heated to the required temperature and fed into a reduction furnace. In this stage, oxygen is removed from the iron ore (a process known as reduction or metallisation), resulting in a product called sponge iron. Because Pilbara iron ore has a lower purity, the sponge iron produced here needs further processing.
3. Melting and refining: The sponge iron is then “melted and refined” in an electric smelting furnace. This stage removes the remaining impurities, producing a high-purity iron metal called pig iron.
4. Cooling and packaging: Finally, the molten pig iron is cooled and packaged—usually in the form of briquettes or granules—for transportation to steel plants, where it will be used in the steel-making process.

To be considered truly “green”, the entire process—from extraction to delivery—must meet specific emissions thresholds significantly lower than current steel-making methods. This is where renewable energy plays a critical role. Replacing traditional, high-emissions inputs (such as coal and gas) with low emissions alternatives such as green hydrogen can significantly reduce emissions throughout the entire process.

The need for a guarantee of origin certificate for green metals

A key need for producing green metals will likely be a guarantee of origins certificate that provides certainty that the product is 100% green or produced from renewables.

The Australian government is proposing a guarantee of origin (GO) scheme for green metals, which will likely encompass hydrogen as well. The proposed legislation aims to overhaul the process through which generators certify the production of renewable electricity. Additionally, it will establish a framework for verifying the emissions intensity of hydrogen, green metals and low-carbon liquid fuels.

The schemes are to be administered by the Clean Energy Regulator, and thus, the certificates are granted by the organisation. The CER has a broad oversight and enforcement remit in relation to the GO scheme and will only register an applicant if it is satisfied that the person is fit and proper. Despite their potential, the value of the certificates is yet to be seen but they could help increase investor confidence and adoption rates for renewable energy and green derivatives such as green metals.

GO certificates are often categorised into two variants. The first is product GO certificates (PGO), which track and verify the carbon intensity of a specific product. These will likely initially focus on hydrogen and later be expanded to low-emission products such as green metals and fuels. The other variant is a renewable electricity GO (REGO), enabling companies to certify their electricity’s origin and renewables origin.

Asked about using a GO for green metals, Wood says “some form of accreditation would seem appropriate” and that a “certificate of origin would seem to fit the bill”. Fortescue echoes this sentiment, saying that implementing a GO certification would be an “important step in providing transparency and ensuring that the energy and other process inputs used in producing green metals genuinely minimise emissions”.

“We see GO certificates as a key market enabler for the green transition. There are several standards and calculation methodologies that can be used to disclose steel emissions, so we would like to see a standardised approach to emissions calculations. We are working with key markets to advocate for green iron guarantees as a priority,” the Fortescue spokesperson says.

The opportunity for closer ties with China

A key discussion point when considering green metals and the broader energy transition in Australia is economically and geographically close ties to China, the current global leader in the roll-out of renewables and the manufacture of modules, batteries and more.

Fortescue is set to capitalise on this opportunity, having said that the country has an “insatiable demand for green products” when discussing green metals production and exports in its 2024 financial year results.

The group also noted it is fully committed to pursuing the opportunity to develop a fully integrated Australia-China green metal supply chain, which could bring closer ties between the nations and aid their decarbonisation. As such, China has been noted as a “core market” for Fortescue’s plans in its financial results.

While the US is currently undergoing a policy rollback on renewables, China continues to storm ahead. To continue its market-leading push, stable and strong green metal supply chains will be critical as the country ramps up its efforts. This again grants an opportunity for Australia to closely align its economy with China’s in terms of the energy transition.

Tim Buckley, director of the think tank Climate Energy Finance (CEF), says: “The single biggest opportunity for Australia is to enhance and pivot our relationship with China”, with green metals to be a core aspect of this.

“We’re exporting green iron, rather than just iron ore, and that way, we’re helping decarbonise the world’s economy, leveraging our world-leading mining sector. The Australian economy could be stronger and more valuable, and our workforce could be pivoted to future industries, so we don’t have to worry about our mining sector being gutted constantly,” Buckley adds. “We just need to transition them into the mining sectors of the future.”

Can green metal ever be ‘green’?

Although work is being done to transition the mining industry into a new age with green practices in mind, questions still arise around the actual term ‘green’ for mining. Over the years, the mining industry has employed questionable practices that have damaged environmental and archaeological/historical sites.

For instance, mines such as Rum Jungle in the Northern Territory have caused severe environmental damage, with acid mine drainage destroying plant and animal life in rivers.

There have been significant implications from a cultural perspective, too. For instance, mining activities have destroyed sites of cultural significance, such as the Juukan Gorge in Western Australia, with Rio Tinto’s explosion destroying 46,000-year-old sites. The location was one of the oldest sites of human occupation in Australia and now lies in rubble.

Wood believes that creating a green supply chain for the mining industry will be crucial to promoting sustainable practices. Renewable energy could be one of those practices that cause a domino effect that leaks into other areas of the mining industry.

Wood says: “This could be the case, particularly if there are controversial forced labour practices in other countries that are not used in Australia. Some environmental concerns may be addressed, but steps in these processes need to be ‘cleaned up’. This may depend on whether green refers only to the use of renewable electricity or hydrogen or whether it’s looking at the overall supply chain.”

Without a doubt, solar PV will be an integral part of Australia’s capitalising on the green metal’s economic opportunity. This could come with closer trade relations with China, something that could have further implications for the energy transition in Australia. Although a controversial practice with questionable previous ethics, mining could be a key cog in the Chinese manufacturing engine, and solar could help the sector on its own revolution.