Ore-some state tipped to win race for green steel jobs
South Australia’s higher-grade iron ore could see it beat Queensland and Western Australia in the race for new lower-carbon industries.
The bubble may have burst for some on over-hyped green hydrogen but the future fuel’s role in the production of green iron and steel is firming, according to a report by the Institute of Energy Economic and Financial Analysis.
Lead analyst for global steel Simon Nicholas said the state had positioned itself at the forefront of national efforts and one of its “numerous tailwinds” was government support for the green iron sector.
Another striking advantage is that its large reserves of high-grade iron ore could be combined with clean energy and available water resources to produce very low-carbon direct reduced iron, also known as sponge iron.
“Miners including Magnetite Mines are keen to open them up,” Mr Nicholas said, releasing the report on Friday.
ASX-listed Magnetite Mines is developing the Razorback Iron Ore Project, 240km from Adelaide.
The state’s iron ore is mostly magnetite, which can be processed into concentrates with the right iron content, with nearly 19 billion tonnes certified, including 7.4 billion tonnes of so-called “economic demonstrated resources”.
Simec Mining, a subsidiary of the GFG Alliance and with Liberty Steel, in the state’s Middleback Ranges, aims to increase magnetite ore production to 30 million tonnes per annum by 2030.
“South Australia does have the right kind – most iron ore in SA is magnetite, which is more easily processed to high grade,” Mr Nicholas told AAP.
“Most Pilbara ore is significantly lower grade. However, there is also magnetite in WA and the WA government is alive to the opportunity to focus on magnetite in response to steel technology.”
South Korean steel giant Posco is considering a production and export project in Western Australia.
However, making green iron production needs competitively priced green hydrogen and proposed tax breaks won’t start until mid-2027 at the earliest, if passed by the federal parliament.
SA’s rapidly decarbonising power grid gives the state an edge, according to the research report.
The state’s electricity grid is forecast to be 100 per cent renewable by 2027 under an ambitious new target and several ports could become green iron industrial precincts to serve Asian industrial giants.
SA Premier Peter Malinauskas’ strategy for a green iron industry in the state by 2030 targets production at a new magnetite mine, first shipment of green iron, construction of a new direct reduced iron plant and an end to coal imports.
He has urged regional communities to back them in, as the Whyalla steelworks would be overhauled and another green iron plant would be built in the Upper Spencer Gulf.
The federal government is also bankrolling green iron as part of the Future Made in Australia push.
But industry players are wary of the cost and the “chicken and egg” problem of needing customers before developing new products.
“Australia is well placed to become an exporter of green iron in addition to iron ore, but federal and state governments need to make sure there are markets for it overseas,” Mr Nicholas said.
“This may require working with the governments of major steelmakers such as China, Japan and South Korea, but also those of emerging Asian nations.”
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