Electolysis sounds like it might be a better way of purifying iron than other current methods which involve large amounts of coal. The following quotes are from an New Scientist article

Producing iron by electrolysis rather than conventional smelting could prevent the emission of a billion tonnes of carbon dioxide into the atmosphere every year. So concludes Donald Sadoway, a materials scientist at MIT in the US who has developed a way producing iron by electrolysing a molten iron oxide in the lab. If the process can be scaled up, it could eliminate the need for conventional smelting, which releases almost a tonne of CO2 for every tonne of steel produced.
In conventional smelting, iron ore is combined with a coal-derived carbon called coke. The coke reacts with the iron, producing CO2 and carbon monoxide, leaving pure iron behind. Electrolysis produces iron a different way. The iron ore is dissolved in a solvent of silicon dioxide and calcium oxide at 1600°C and an electric current passed through it. Negatively-charged oxygen ions migrate to the positively charged anode, and the oxygen bubbles off. Positively-charged iron ions migrate to the negatively-charged cathode where they are reduced to elemental iron which collects in a pool at the bottom of the cell and is siphoned off.
Sadoway says that the technology has a number of hurdles to overcome. The biggest is finding practical anode material. In his experiments, he used an anode made of graphite, similar to baked carbon anodes used for making aluminium. Unfortunately, the carbon reacts with the oxygen, releasing about as much carbon dioxide into the air as the conventional iron-making process. Platinum anodes can be used, but are too expensive for large-scale manufacturing. Possibilities include metal alloys that form an oxide on the outer layer but still conduct electricity, or conductive ceramics. Fruehan is also sceptical about the likelihood of a practical carbon-free anode, since the aluminium industry has been trying for years to develop one and still has not.
Another problem is that the process uses a lot of electricity: about 2000 kilowatt hours per tonne of iron produced.

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Last Modified: August 30, 2006