Hazer Group Ltd (ASX:HZR, OTC:HZRGF) has entered into a non-binding memorandum of understanding (MoU) and graphite offtake letter of intent (LOI) with Green Steel of WA Collie, marking a key step in commercialising its graphite by-product and linking its technology to a proposed low-emissions steelmaking project in Western Australia.

The agreement represents Hazer’s first formal framework for supplying graphite into the steel sector and positions the company within the emerging green steel value chain.

The partnership centres on Green Steel of WA’s planned Collie Steel Mill, which is being developed as Australia’s first low-emissions steel mill and the first new domestic steelmaking facility in more than 30 years.

Construction is targeted for late 2026, with initial operations expected in 2028. The facility is designed to produce steel rebar using recycled scrap steel for both domestic and export markets.

Under the proposed LOI, Hazer would supply graphite from future production facilities for use as a recarburiser in the mill’s electric arc furnace, replacing traditional anthracite inputs used in steelmaking.

The agreement contemplates supply of up to 85,000 tonnes over 10 years, equivalent to 8,500 tonnes per annum, with deliveries expected to begin in 2030, subject to further testing and project development milestones.

Pricing is proposed to be linked to the landed price of anthracite at Bunbury, less a 5% discount, providing an initial commercial reference point for Hazer’s graphite product. The company noted current anthracite pricing at around A$400 per tonne.

The MoU extends beyond offtake and sets out a framework for collaboration across the development of the Collie project, engagement with government and support mechanisms, and advancing Hazer’s role in steel sector decarbonisation.

It also includes progressing the non-binding LOI toward a definitive agreement and exploring additional areas of cooperation. The arrangement is non-exclusive, with each party responsible for its own costs.

The agreement positions Hazer within one of the more challenging industrial decarbonisation pathways, with steelmaking a major global emissions source.

Hazer’s process produces hydrogen and high-purity graphite from natural gas, with the graphite offering a potential lower-emissions substitute for traditional carbon inputs in electric arc furnace operations.

The immediate focus will be on further graphite testing and qualification, alongside progressing the current non-binding terms into a binding offtake agreement.

In parallel, Hazer will continue advancing its future production capacity while Green Steel of WA progresses development of the Collie Steel Mill toward its targeted construction and production timeline.