Swiss testing, inspection and certification company SGS has announced a partnership with Canadian technology developer Carbonix Inc. to pilot the latter's P180 direct reduction technology, which is designed to produce hot briquetted iron (HBI) from iron ore concentrate using hydrogen generated on site.
Under a definitive agreement signed in June 2026, the companies will establish the SGS-Carbonix pilot plant at SGS's Metallurgical Centre of Excellence in Lakefield, Ontario, to evaluate the technology's technical performance, operational characteristics and potential for industrial-scale production. Carbonix, an Indigenous-owned company headquartered at Fort William First Nation in Ontario, developed the P180 process and retains its intellectual property rights, while SGS will provide independent testing and technical validation.
P180 technology integrates iron ore processing and hydrogen-based direct reduction
The P180 process is designed to combine three production stages that are conventionally carried out at separate facilities: upgrading iron ore concentrate to direct reduction grade, agglomeration and reduction into metallic iron. Hydrogen is generated on site from pipeline natural gas through methane pyrolysis, a process that separates methane into hydrogen and solid carbon rather than producing carbon dioxide directly.
The resulting hydrogen is subsequently used to reduce iron ore into metallic iron, while part of the carbon is intended to remain in the resulting material for use during steelmaking. The process aims to produce HBI suitable for electric arc furnace (EAF) steelmaking, where it can be used alongside steel scrap. According to SGS, this approach could provide an alternative route for producing lower-emission iron feedstock. However, sustained, integrated operation of P180 has not yet been demonstrated and will be a central objective of the pilot program, the company emphasized.
Under the agreement, SGS will be responsible for upgrading and agglomerating the iron ore feedstock, overseeing reactor operations and conducting material assays and characterization. Extended operating campaigns will be carried out to assess process performance, product quality and key operational parameters, with results evaluated against predefined acceptance criteria. The evaluation will conclude with a pre-front-end engineering design (Pre-FEED) study and a preliminary design basis for a future demonstration-scale facility. The technical data generated will help identify potential operational challenges and determine whether the process is suitable for further development and scale-up, according to SGS.
First commercial P180 facility targeted in Ontario
Carbonix aims to establish its first commercial P180 plant in Ontario, with site selection expected to follow the results of the pilot program. The company plans to adopt a royalty-based business model under which partners would finance, construct and operate P180 facilities, while Carbonix would retain ownership of the technology and receive royalties on production. The project is intended to address a gap in Ontario's steel supply chain, where the transition toward EAF steelmaking is increasing demand for high-quality metallic iron feedstock. According to the announcement, Ontario currently has no domestic HBI production facility. The provincial government added high-purity iron to its critical minerals list in March 2026, reflecting its importance for the steel industry's transition toward EAF production.
Technology aims to increase value of Canadian iron ore production
The partnership also highlights the potential for P180 to support domestic processing of Canadian iron ore rather than exporting it primarily as concentrate and pellets. According to Natural Resources Canada figures cited in the announcement, Canada produced approximately 70 million mt of iron ore in 2024 and exported 60.9 million mt, representing nearly 90 percent of its output. The federal government added high-purity iron ore to Canada's critical minerals list in 2024.
Carbonix stated that its process is designed to convert iron ore concentrate into higher-value metallic iron within a single facility, potentially supporting domestic steel supply chains and the development of hydrogen-based ironmaking expertise. The companies emphasized that the results of the SGS pilot program will provide the technical basis for assessing future commercial applications of the P180 process.
