A new approach to iron ore processing could reshape how Australia taps into the growing green steel market, with fresh funding backing efforts to bring the technology to scale.
Adelaide-based DryFlow Magnetics is extending its seed round as it looks to accelerate deployment of its dry magnetic separation technology, designed to produce high-purity iron ore concentrate without the need for water — a longstanding constraint in many of Australia’s key mining regions.
The pitch is straightforward: unlock stranded or lower-grade resources, upgrade them into premium feedstock for green steel, and do it more efficiently in the process.
The concept is beginning to resonate with miners and investors alike.
Turning a constraint into an opportunity
Water scarcity has long shaped the economics of mining in Australia, particularly in iron ore-rich but arid regions. Traditional processing methods rely heavily on water and energy, limiting the viability of certain deposits and adding to operating costs.
DryFlow’s approach removes that bottleneck.
Its technology uses dry magnetic separation to produce high-grade concentrate — the type increasingly required by steelmakers as they look to decarbonise — without the need for wet processing. It’s an especially important proposition in a market where ore quality is declining globally, while demand for higher-purity inputs is rising.
Australia already dominates global iron ore exports by volume, but much of that material is lower grade. The opportunity now lies in upgrading that output — and capturing more value domestically rather than exporting raw material.
Industry estimates suggest such a shift could be significant. The Superpower Institute has flagged a potential $386 billion annual market for upgraded iron products by 2060, more than triple the current value of the iron ore industry.
From lab to mine site
DryFlow is now moving beyond proof-of-concept.
The company plans to install its first commercial pilot plant at Peak Iron Mines’ Buzzard Mine and Hawks Nest project in South Australia, marking a key step towards real-world deployment.
At the same time, it is raising additional capital to fund further plant fabrication and scale-up, building on a $10 million seed round completed late last year with backing from Orion Industrial Ventures, Virescent Ventures and Taronga Group.
The model is also designed to lower barriers to adoption. Rather than selling equipment outright, DryFlow offers “separation as a service”, installing its systems on-site and charging based on throughput — avoiding up-front capital costs for miners.
That structure could prove attractive in a sector grappling with rising costs and tighter capital discipline.
Critical minerals angle adds momentum
While iron ore is the immediate focus, the broader opportunity extends into critical minerals — a space already attracting strong policy and investment support globally.
DryFlow’s technology has been tested across a range of ore types and is positioned to recover value from tailings and lower-grade stockpiles, including nickel, cobalt and rare earths.
This is particularly relevant in the United States, where the company has already secured its first customer amid a broader push to develop domestic supply chains for critical minerals.
The ability to reprocess legacy waste streams also adds a sustainability angle, aligning with growing pressure on miners to reduce environmental footprints while improving resource efficiency.
A crowded race, but a clear niche
None of this is happening in isolation.
Globally, the race to decarbonise steel — responsible for roughly 7–9% of emissions — is driving innovation across the supply chain, from hydrogen-based production to alternative feedstocks.
But high-grade iron ore remains a critical piece of that puzzle.
Countries like Brazil and Canada already produce premium concentrates using established wet processing methods. Australia, despite its scale, has lagged in that segment — largely due to its water constraints.
That gap is where DryFlow is aiming to play.
The early signs — including pilot deployment, inbound interest from major miners and fresh funding support — suggest the concept is gaining traction.
For investors, it’s another reminder that the next phase of the resources cycle may not just be about finding more ore, but finding better ways to process what’s already there.
And increasingly, that’s where the tech comes in.