I believe we've now started. Welcome to Calix Limited's Investor Briefing. Chief Executive Officer and Managing Director, Phil Hodgson, will provide an overview of Calix's zero emission steel technology, application otherwise known as ZESTY. I'm Kylie Ramsden, Managing Partner of GRACosway, and I'll be hosting today's briefing. Following Phil's presentation, we'll open for questions. Darren Charles, Chief Financial Officer, and General Manager, Sustainable Processing, Chris Ormston, will join Phil in responding to questions. Over to you, Phil.
Excellent. Thanks very much, Kylie, and thanks all for joining us today. This is the first in a series of webinars we'll be doing, where we'll do, if you like, a bit of a deep dive into some of the applications that we're developing our core technology into. Obviously, the lime and cement piece is one that's probably fairly well known, and indeed, even just this morning, you may note that we've put up an announcement about a joint venture we've put together with Heidelberg Materials, covering the LEILAC-2 demonstration facility that we're progressing at that new site at Ennigerloh. Hard to pronounce, but that's what it's called, Ennigerloh in Germany.
So it's really great to get that formalized with Heidelberg Materials, and as per the announcement, starting to discuss what the LEILAC- 3 plant would look like there as well, in parallel with developing the LEILAC- 2 facility. So, we may do the next deep dive on LEILAC. We'll see how we go. But we wanted to do ZESTY today, our zero emission steel technology. So if we sort of start to move through the pack, Darren, we'll go to the next slide, which is our important disclaimer. I'm sure this pack will be put up on the web, and you'll all be able to read through our disclaimer. So we won't try and attempt to read through it today, though.
If we have a look through what we wanna cover today, for those of you who've only got a few minutes, I'm gonna hit some key highlights first. In those key highlights, I really wanna bring to the fore what we know about ZESTY today, in terms of the technology, where it sits within the industry, and what our commercialization pathway is. I'll then move through more into a general introduction to Calix, just to make sure those of you who aren't familiar with us or the technology are brought up to speed. I'll talk about the technology status with ZESTY, the results of the most recent and continuing runs that we're doing on Australian iron ores.
I'll talk about the industry opportunity more broadly, and this is an area that we haven't covered more fully previously, and an area we've done a lot of work on to understand the value proposition, and that's really shaping our commercialization strategy. That's the other last piece that I'll be covering today. Obviously, as Kylie said, we'll be opening up for Q&A towards the end of the talk. I tend to try and get this done in about 30 minutes or just over. So, if I can get that done, we'll have plenty of time for Q&A at the end. Okay, let's move into it. Key highlights, just for those of you who've only got a very short space of time.
First of all, a pretty obvious statement, iron and steel are pretty essential, I think, in most forward projections. Iron and steel are gonna continue to be required by society today. They're responsible for over 8% of global CO2 emissions, and, all of those emissions, well, most of those emissions are coming from making of iron. 80% comes from making iron in the production. And, so this is a big issue, especially countries, you know, representing 90% of global gross domestic product. They're under net zero commitments, and yet you have a product here, called iron and steel, that is contributing an enormous amount, similar to cement and lime, so both together are about 16% of global CO2. So, very hard to abate industry.
We put together ZESTY, if you recall, back in about 2021. We had our Chief Scientist come up with a great idea to look at the core technology to apply to iron and steel by using hydrogen. And hydrogen, and I'll talk about our reactor shortly, but it's introduced into our reactor, the same reactor we use for cement and lime, just repurposed for iron and steel. And we're targeting lowest hydrogen use. Hydrogen is a great product for removing the oxygen off iron ore to make iron, but hydrogen's really expensive, as most people know. And what we have here with ZESTY is a way to minimize use of green hydrogen in green iron-making. That is the way to get the cost down. That is the easiest way to get the cost down in green iron-making.
So where we saw big potential for ZESTY is basically making sure it was lowest hydrogen use in green iron making. The other thing, of course, that we're very interested in with ZESTY is the fact we can process low-grade ores and upgrade those ores potentially as part of the process. That particular area's importance to Australia, as I'll cover off in my industry section, because 96% or so of the ores we export currently are unsuitable for electric arc furnaces, and that is an existential threat for this country, where I think 44% of our resource earnings are earned from iron ore exports. Just over 30% of our total export earnings are iron exports, iron ore exports. So there's an existential threat through there as the world decarbonizes and moves to electric arc furnace.
So, we need to do something about that here. Quick takeaway, 2021, we filed that patent. We upgraded our facility at Bacchus Marsh to be able to run hydrogen and do the first bits of testing within the space of a few months, and did those first quick tests to see whether the technology worked. We then modified the reactor further to give it more flexibility, and have since carried out, as I mentioned, probably over 130-140 different test runs on nine different ores. And so the ability to quickly pivot and convert the reactor to hydrogen is a key advantage of the technology.
But we've been going since 2021, and some of the other technologies that I'll talk about today have been going for decades. So, it really does say something about the flexibility and the potential of our technology, not just in green steel, cement and lime, but other applications we're developing as well. So if we move on, Darren. What I'll cover today are three sort of specific areas. Certainly industry, I mentioned before. I wanna really paint a picture of the industry as it stands and how ZESTY fits into that as we develop it. In terms of technology, I mentioned before the pilot that we got going at Bacchus Marsh in a very short space of time, and has now rigorously tested nine different ores from the Pilbara. Other ores are coming in from overseas.
That pilot, we run on renewable energy, so it is connected through to a third of a megawatt of solar panels sitting on the warehouse roof down at Bacchus Marsh in Victoria. So we're already powering our pilot with renewable electrons. As I mentioned before, we're targeting minimal hydrogen use. Our technology, as I'll describe shortly, is compatible with fines. In fact, it's gotta be fine material. And that's good in this case, because there's millions of tons of super fine material produced in Australia as we mine iron ore, and a lot of those fines don't get sold overseas. A lot of them are considered waste material. And so there's a great entree for the technology into the iron ore industry here to convert waste to a better product, as in a green iron.
We don't need to pelletize. That's where you collect the smaller particles and put them together into a pellet to go into a standard furnace, 'cause a standard furnace will blow small material out of it. We don't need to pelletize. That removes a processing step. It removes capital, it removes energy from converting into a green iron, and so that's an advantage of the technology. We've done some briquetting trials. So once you've made the green iron, what do you do? You make these briquettes of iron to be sold overseas, and that's in and of itself a reasonably technical process, which we're already getting some very encouraging results on. And obviously, the patent protection around the technology is critical for us as well.
As I mentioned, a patent filed in, in 2021, and, who's to say that, certainly there... We've continued to develop the technology, and further protections may be required with all of the stuff that we've learned since, which is quite extensive. Lastly, I'll cover off today the commercial, go-to-market strategy with this particular technology. For those of you familiar with our Leilac business, it looks pretty familiar. We're going capital light. We wanna have a licensing and royalty bi-type business model. We've got potentially attractive economics, even without carbon pricing, for this particular technology. And so commercial traction, we're hopeful, can be quite quick. We can have multiple decarbonization pathways.
So iron and steel is made, as I mentioned before. There's electric arc, but there's also a standard blast furnace or basic oxygen furnace, steel making. I'll cover what ZESTY's value proposition is for both of those steel making techniques. As I mentioned before, we had the LEILAC model that we spun out. We spun out part of LEILAC in 2021, which is the lime and cement piece. We're getting impact fund investment into that particular piece to accelerate its commercialization and deployment. So that's a potential pathway for ZESTY as well, and I'll cover off why we think that's probably a high potential and good idea to do.
And lastly, we've got some great collaborations going with, with iron producer steelmakers via the Heavy Industry Low Emissions Transition Cooperative Research Centre. And I'll touch briefly on that as I go through the commercial pathway as well as to, you know, who we're working with. So let's move through into a bit of a more of a deep dive into who we are as Calix, the technology, and then I'll cover industry and finally, commercialization. So if we move through to, next slide, Darren. For those of who aren't aware of Calix, we've been around since 2005. We listed the company 2018. We've now got over 120 employees, and we've invested a lot of money to date to develop the technology to where it is.
We're active now in seven countries across five continents, so we have teams in Asia Pac, teams in Europe and teams now building in the States to really take advantage of the decarbonization efforts that are happening around the world, and to have local teams that are managing projects. I've talked at some stages earlier about the pipeline of projects we've got going through the Leilac- lime and cement piece. I'm gonna be talking about the pipelines that are starting to develop in iron and steel, and alumina, and in lithium. So several different applications of the technology being developed and interest in pipelines starting to build across all of those as well. If we move through, Darren, to the next slide, just in terms of the core technology.
For those who aren't familiar, again, I'll very briefly describe. It's basically a new type of kiln or furnace, a new way to heat stuff up, if you will. In a traditional kiln or furnace, you put what you heat and how you heat in the one vessel, so the fuel and the rocks, and you light a match. Obviously, it's a bit more sophisticated than that over the years, but that's essentially the core principle. What we do is we separate how you heat from what you heat. We do that with a rather large steel tube. I'm here in the States at the moment, and my traveling little model of our technology is with me here, my toilet roll. So we have a rather large steel tube. We heat that tube from the outside. We heat that with fossil fuels.
We can heat it with waste, we can heat it with biomass, or we can heat it with renewable electrons. We're energy agnostic. And so that's the first sort of key advantage. It's a great kiln because it's energy agnostic, and as industry electrifies, it's gonna be a great way for industry transition to low carbon intensity. What we heat goes down the middle of the tube. It needs to be a small particle size. Anything smaller than a third of a millimeter is fine. And so imagine holding a lump of flour in your hand, and imagine then dropping that to the floor and watching the flour float down. That's all we're doing down our tube. We're dropping what we want to heat down the tube.
We heat the tube to over 1,000 degrees centigrade, and so, the red hot walls of the tube basically radiate heat into the powder, and that's what heats the little particles up, that radiative heat. So why do it that way? Well, the first reason is, the very first business at the top of the slide there called Leilac, which is carbon capture. Leilac is involved with looking at unavoidable CO2 emissions coming from limestone. There's a lump of limestone. Nearly half the weight of that is CO2 trapped in that rock. And when the cement and lime industries heat that up, they release that CO2. Cement and lime is responsible for about 8% of global CO2, and over half of that is coming from the rock, so it's unavoidable.
So even as the cement and lime industry decarbonize and electrify kilns, hopefully with ours, they've still got over half their emissions coming from this. Of course, in our kiln, as the ground limestone is dropped down, the CO2's got nowhere to go as it comes out of those little particles. It can't escape to the furnace. It comes out the top as a pretty pure stream. And so what it represents and what the LEILAC business is doing is commercializing a new type of kiln that directly separates the CO2 that comes from the rock. And that's a piece of business which is moving ahead very nicely for us. The second business down here, which is called Sustainable Processing, and this is where ZESTY sits. It's the ability to electrify this with renewable energy.
And particularly with ZESTY, the fact that we have a tube means we can have an isolated gas in there that doesn't get contaminated and is not lost. And that's part of the reason why when you introduce hydrogen in here, it's a very efficient use of hydrogen to reduce iron ore to iron. And I'll talk about ZESTY in a more fully shortly. So, several different applications for the technology. Magnesia is a third application, where we're producing some pretty interesting stuff out of magnesia, which is used to make things like magnesium hydroxide for water treatment. And that business is actually earning us some reasonable revenues and growing revenues as well.
So if we go to the next slide, Darren, you can see sort of across our business, we've got several different lines of business that we're developing. The carbon capture piece is under Leilac, targeting cement and lime and direct air capture. The sustainable processing piece, you can see, several under there. ZESTY is what I'm focusing on today, but the Pilbara Minerals joint venture is focusing on lithium. And that particular... We're just hopefully about to start construction at the Pilbara Minerals site in Pilgangoora, so targeting production of our commissioning in April next year. So that particular project is very exciting. We're a 45% joint owner in that. Alumina is another one there, and that may be worth another deep dive session at another time.
And the magnesia business, which is earning us quite nice revenues in water and some higher prospective businesses we're looking at and developing, in agriculture, marine, and bio. And that's where we're using magnesium oxide, for some interesting bioactive properties. So we're working with quite a few different partners, as you can see there on this particular slide. The revenue model is light. We wanna go license fees. We've got licenses in place already across the Leilac business, one with Heidelberg Materials, one with Heirloom, and more were under negotiation. And they're a $1 per ton type, not $1 necessarily. I'm just saying they're a, a certain number of dollars per ton in terms of the royalty value. And Heirloom, is $3 per ton CO2, and they're targeting over 1 billion tons of capture by 2035.
So quite significant potential revenues and values associated with that business there. I'll talk about this in this meeting, where we think ZESTY will be in that total addressable market. So, hang around for that. We've got an idea of what royalty we think we should be able to achieve, and we're being, I think, conservative, 'cause we're sort of looking at about half the rates of the LEILAC royalties in the numbers I'm gonna talk to you about. But huge businesses, obviously, those iron and steel businesses, just iron itself, a market size, probably $640 billion per annum in total revenue or value, and we're looking at a percentage of that as far as royalties. Okay, let's keep moving, Darren, and finish off intro to Calix.
We've obviously built a few of these kilns. The one on the left is the magnesia kiln that's been operated since 2013, so well over 10 years of operation now, thousands of hours. We have industrial robustness proven there. Very, very low maintenance. We have a great kiln, full stop. The lime and lime and cement application there is the LEILAC-1 facility in Belgium. That's the largest CO2 separation facility on a cement site outside of China. The Chinese version is an amine system, a different sort of chemical system, which is roughly sort of twice the size of LEILAC-1. But LEILAC-1 remains the largest on a cement facility outside of China today, and that's today, and we commissioned that in 2019.
Obviously, we're, as I mentioned before, we're moving through to LEILAC-2, and the announcement today with Heidelberg Materials is, is, really important for us. The next one there along is the test facility, fully solar-powered, that we're testing all sorts of things on, including iron and steel. And the iron ore results were done on that particular facility there, the blue-colored column. And across, the-- to the right, you can see there a rendering of what the next one we're gonna be building for ZESTY would look like. 30,000 tons per annum. FEED study has been complete, the front-end engineering design.
And so working with several partners there on that FEED study, and, that particular one there, again, will be, the subject of a bit more detail as I move through the presentation. So Darren, if we could move down a bit further. Let's have a look at the technology and where it's at in terms of its status. So there's a diagram on this slide of the ZESTY reactor itself, and if you have a look at that, and you can imagine those iron ore fines coming into the top of the reactor. Remember my little toilet roll? Iron ore fines in the top, and in the bottom, we put hydrogen. That hydrogen loves the oxygen on iron ore. It will rip that oxygen off the iron ore and make iron. And the hydrogen itself, when it does that, converts to steam.
So hydrogen plus oxygen, H2O steam. And so at the top of our reactor, that sort of brown tube coming out the top, comes a mixture of any unreacted hydrogen and steam. And so all we've got to do is condense that steam, so we turn it back into water, it can go back and make more hydrogen, and any unreacted hydrogen is simply recycled back into the ZESTY reactor. This is the way we achieve minimum hydrogen use. As I mentioned before, hydrogen is gonna be the most expensive part of making a green iron or steel using hydrogen direct reduction. And when I cover off the competitive technologies, none of them are gonna be able to-