Clean iron producer Electra announced that it has raised $186 million in a Series B funding round, with proceeds from the financing aimed at supporting the path to commercializing its technology to decarbonize iron and steelmaking.

In addition to financial investors, the round included several strategic investors from across the mining, steel, and consumer sectors, including BHP Ventures, Rio Tinto, Roy Hill, Nucor, Yamato Kogyo, Interfer Edelstahl Group and Toyota Tsusho Corporation.

According to Noah Hanners, Executive Vice President at electric arc furnace (EAF) steel producer Nucor, the investment comes as the company is seeing a shift in the automotive sector towards EAF steel, as “OEMs’ (original equipment manufacturer) focus on lowering the embedded carbon footprint of their vehicles.” Nucor has set a goal to achieve net zero steelmaking by 2050.

Hanners added:

“That transition makes technologies like Electra’s even more critical. As we produce more EAF steel for the automotive market, our demand for sustainable feedstocks like Electra’s product will only continue to grow.”

Founded in 2020, Colorado-based Electra has developed a low-temperature process to electrochemically refine iron ore into 99% pure iron, using chemistry and renewable energy in place of traditional ironmaking’s coal and extreme heat. The process works by dissolving iron ore in an acidic solution, removing co-products from the solution and then running electricity through the solution to electrodeposit the iron onto metal sheets. Key benefits of the technology include the ability to use intermittent renewable energy due to the low-temperature needs of the process, and to use a wide range of ores, including previously mined and unused materials, compared with traditional ironmaking, which requires high grade ores as feedstock. The process also removes co-products such as silica and alumina, reducing waste and preserving critical minerals.

According to Electra, the new capital will support the construction of the company’s demonstration plant in Colorado, starting later this year, which will produce clean iron for partner testing and qualification, as it prepares for a commercial plant by the end of the decade.

Electra CEO and co-founder Sandeep Nijhawan said:

“Electra’s technology can significantly reduce the steel industry’s carbon footprint, and we are thrilled to have the support of such a diverse group of investors who share our vision of reinventing ironmaking from the ground up. There is a growing demand for our clean iron and this funding puts us on the fast track to commercial-scale production.”

The funding round was led by Capricorn Investment Group and Temasek, with participation from financial investors Breakthrough Energy Ventures, Builders Vision, Collaborative Fund, Earth Venture Capital, Lowercarbon Capital and S2G Investments, in addition to the strategic investors.

Dipender Saluja, Managing Partner of Capricorn’s Technology Impact Fund said:

“Capricorn invests in category-defining companies addressing large market opportunities and tackling the world’s most pressing problems. Electra’s approach to making iron is a paradigm shift from traditional approaches, and we are proud to partner with leading financial and strategic investors to support Electra on its mission.”