Image source: © 2025 Krish Capital Pty. Ltd.

Highlights:

  • CXL executed final agreements on a AUD 44.9 million ARENA grant for ZESTY demonstration plant.
  • CXL’s planned facility aims to produce 30,000 tonnes annually of H2-DRI or HBI.
  • Calix to pursue final investment decision in FY26, with commissioning expected in 2028.

Calix Limited (ASX:CXL), an Australian environmental technology company, has executed final agreements with the Australian Renewable Energy Agency (ARENA) to receive a grant of AUD 44.9 million for the construction of a Green Iron Demonstration Plant based on its Zero Emissions Steel Technology (ZESTY). The project aims to explore low-emissions pathways in steelmaking by leveraging hydrogen-based direct reduction processes. The ZESTY Demonstration Plant is designed with a target production capacity of 30,000 tonnes per annum of hydrogen direct reduced iron (H2-DRI) or hot briquetted iron (HBI). The facility will offer toll processing of iron ore sourced from multiple producers.

The proposed demonstration facility will also complete an engineering study for a future commercial-scale ZESTY plant. The location of the demonstration plant has not been publicly disclosed due to commercial considerations. A Final Investment Decision (FID) is planned for FY26. Subject to securing matching funding, procurement and construction activities are expected to commence in 2026, with staged commissioning and operations anticipated from 2028 onward.

ARENA’s grant is expected to fund up to 50% of the project budget and is contingent on the achievement of key project milestones and co-funding contributions. Calix stated that it has sufficient internal resources to support the project through the end of FY26. The company intends to finance the remaining project budget through a combination of equity funding via strategic or financial investors in a dedicated ZESTY subsidiary and potential project finance. The demonstration plant follows ARENA-funded pilot-scale trials which indicated the potential of ZESTY technology to produce green iron from a variety of ore types, including lower-grade ores from Australia’s Pilbara region. These trials provided foundational technical insights that inform the scale-up initiative now underway.

In remarks accompanying the announcement, Australian Minister for Climate Change and Energy, Chris Bowen, noted that green metals are a focus of the federal government’s Future Made in Australia agenda. He highlighted the relevance of low-emissions steelmaking to both domestic employment and Australia’s trade competitiveness, given the country’s role as the world’s largest iron ore exporter. ARENA CEO Darren Miller commented that Australia has a key role in lowering emissions in the steel value chain, and technologies such as ZESTY may contribute to this effort, especially if combined with renewable energy inputs such as solar and wind. He pointed out that ZESTY’s process could potentially reduce the amount of hydrogen required in direct reduction, an area of concern in terms of cost and scalability.

According to Calix, the ZESTY Demonstration Plant is being developed with a view toward compatibility with multiple ore types and grades. It is intended to function as a multi-user platform that could assist various stakeholders across the steel and iron industries in evaluating green processing options. The system's design reportedly allows for operation using intermittent renewable electricity and may eliminate the need for ore pelletisation, which is typically energy-intensive.

CXL shares were trading 24.76% higher at AUD 0.66 per share as on 24 July 2025.