Calix (ASX: CXL) Jumps 32% as Landmark Rio Tinto Deal

Calix Shares Surge 32% After Signing Transformational Green-Steel Deal With Rio Tinto

Calix (ASX: CXL) surged 32% today and, in many ways, just secured the kind of breakthrough most climate technology companies spend a decade chasing. In a world shaped by geopolitical tension, energy insecurity and an accelerating global race to commercialise low carbon industrial processes, the new Joint Development Agreement with Rio Tinto is much more than a partnership. It marks a shift from concept to execution in the push toward green steel, and it positions Calix as one of the few Australian players with a genuine shot at influencing the next era of ironmaking.

Rio Tinto’s commitment, worth more than A$35 million, immediately reshapes Calix’s commercial trajectory. It provides matched funding for the ARENA grant, removes a major financing hurdle and brings one of the world’s most influential resource companies into the fold. For a technology still progressing from pilot to demonstration scale, this stands as one of the strongest endorsements Calix could have hoped for. In our view, the announcement does not guarantee commercial success, but it meaningfully elevates Calix from a promising climate technology developer to a company with a clearer pathway toward large scale industrial adoption.

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A Deal That Redraws the Commercial Map

The announcement centres on a Joint Development Agreement for Zesty, Calix’s zero-emissions hydrogen-powered Direct Reduced Iron process. The partnership includes A$3 million upfront, a further A$5 million before final investment decision, and more than A$27 million of in-kind support ranging from engineering muscle to the delivery of 10,000 tonnes of iron ore. Crucially, all of this counts toward Calix’s matched-funding requirement for the A$44.9 million ARENA contribution, which in turn strengthens the project’s financing path well ahead of the 2026 FID.

The upcoming demonstration plant in Kwinana will produce 30,000 tonnes a year of hydrogen-based DRI once commissioned in 2028. It is a relatively compact project at roughly A$90 million, but it carries disproportionate importance. Demonstration plants create data, credibility and customer confidence. With Rio Tinto committing to tolling rights and agreeing to process its own ore through the plant, utilisation risk is sharply reduced.

A Licensing Structure Built for Global Reach

Rio Tinto will receive a perpetual non-exclusive licence to use Zesty globally, can market the technology to steelmakers and may take equity in the Zesty subsidiary up to the value of its A$8 million cash contribution. Calix keeps full ownership of the technology and the right to sign additional partners, allowing it to build a multi-client licensing model. For a platform technology with relevance well beyond steel, this flexibility matters.

The Road Ahead

Calix now enters a more demanding phase. Demonstration plants can stumble. Hydrogen costs remain uncertain. Timelines to FID and commissioning must hold. And while the non-exclusive licence with Rio Tinto gives Calix freedom, it also means adoption is not guaranteed. The company must convert technical success into customer pull across multiple regions.

Balancing the Risk and Reward: The takeaway for CXL

For investors, the upside is clear. If Zesty performs as expected, Calix could become a global leader in hydrogen-DRI technology, supported by licensing income, recurring royalties and strong strategic partners. The downside lies in delays, scale-up hurdles, hydrogen price volatility and the possibility that customer uptake lags expectations. The reward materialises only if the demonstration plant runs reliably, hydrogen remains competitively priced and iron ore majors embrace the technology. Risk takes over if timelines slip, the mineralogy challenge proves tougher than expected or funding tightens. The truth is that the opportunity is real, the uncertainties are genuine and each quarter from here becomes a test of execution. Investors should recognise both the scale of the potential prize and the discipline required to reach it.