Green steel startup Boston Metal raises $120M for its fossil-free tech

Boston Metal, an MIT spinout working to curb emissions from steelmaking, on Friday said it raised $120 million in Series C funding to expand green steel production in Massachusetts and beyond.

International steel giant ArcelorMittal led the investment round, which also included Microsoft’s Climate Innovation Fund and SiteGround Capital. With the latest funding, Boston Metal has raised over $200 million since launching from an MIT lab in 2012.

“In Boston Metal, we are investing in a team that has made impressive progress over a relatively short period of time, developing a technology that has exciting potential to revolutionize steelmaking,” Aditya Mittal, CEO of Luxembourg-based ArcelorMittal, said in a statement.

Manufacturers churn out nearly 2 billion metric tons of the high-strength material every year for household products such as refrigerators, washing machines and cars, as well as infrastructure components including bridges, railways and roads. Today, most steel is made in coal-burning furnaces that melt iron ore.

As a result, steel production accounts for between 7 and 9 percent of global greenhouse gas emissions, according to the World Steel Association.

Boston Metal is developing a process that doesn’t directly involve any fossil fuels, as Canary Media reported last year. The startup’s approach, called ​“molten oxide electrolysis,” involves using electric currents to heat iron ore to around 1,600 degrees Celsius — hotter than molten lava — to drive chemical reactions. The resulting material then cools into blocks of steel. The process can also be used to make high-value metals including tin and niobium.

In 2018, Boston Metal raised $20 million in a funding round led by Breakthrough Energy Ventures, the venture capital firm founded by Microsoft co-founder Bill Gates. Three years later, the startup raised an additional $50 million from Breakthrough, mining giant BHP and other investors to build a demonstration plant in Woburn, an industrial suburb of Boston.

On Friday, Boston Metal said the $120 million investment will allow the company to expand production of green steel at its existing pilot facility in Woburn and will support the site selection and preliminary design of its first green steel plant. The Series C funds will also allow the company’s Brazilian subsidiary, Boston Metal do Brasil, to build and begin operating a manufacturing facility for high-value metals.

“Our technology is designed to decarbonize steel production at scale,” Tadeu Carneiro, chair and CEO of Boston Metal, said in a statement. He added that ArcelorMittal’s latest support ​“further reinforces our capacity to lead the green steel revolution.”