The process - Dry Slag Granulation (DSG) - also reduces water use and greenhouse gas emissions and it is the focus of an agreement signed by CSIRO and the Beijing MCC Equipment Research & Design Corporation (MCCE).
According to CSIRO director of the mineral resources flagship Jonathan Law, the signing of the agreement, which will demonstrate CSIRO's DSG technology at industrial scale, is a landmark for Australia-China research collaboration and for environmentally friendly metal production.
"Our collaboration is an exciting step towards the uptake of an innovation with real prospects of transforming the productivity and environmental performance of global iron smelting," Law said.
"The benefits from wide uptake of DSG technology on blast furnaces will be profound in helping the global industry to reduce water and energy use and greenhouse gas emissions while sustaining metal production."
The DSG technology is fitted to blast furnaces and includes a spinning disc and granulation chamber, which separates molten slag into droplets under centrifugal forces, uses air to quench and solidify the droplets, and extracts a granulated slag product as well as heated air.
The process produces a "glassy" product ideal for cement manufacture, but has significantly lower associated greenhouse gas emissions than cement produced by conventional methods.
Air at 500 to 600 degrees Celsius extracted from the DSG process can be used onsite for drying, preheating or steam generation.
CSIRO said the technology also saves water and eliminates underground water pollution that can be associated with alternative wet granulation processes.
"The benefits each year from full commercialisation and adoption of DSG technology are in the order of 60 billion litres of water, 800 petajoules of heat energy and 60 million tonnes of greenhouse gas emissions," Law said.
"Those savings are equivalent to 14 percent of Australia's energy use and about 10 percent of our greenhouse gas emissions each year."
Under the agreement MCCE is to scale-up and demonstrate the technology at industrial scale and, upon success, commercialise it in China and then potentially worldwide.
The agreement is the culmination of more than a decade of DSG technology development by CSIRO and industry partners including Arrium and BlueScope.
This work covered initial design and proof of concept stages through to the construction and operation of prototype DSG pilot plants at small, intermediate and large scales.