WA govt wants to establish local green steel sector

20 June, 2023

Western Australia (WA) currently accounts for 38% of the world’s iron ore supply, but it does not produce any steel. However, a recently commissioned government report aimed to explore how to make a green steel industry possible in the region rather than determining its feasibility.

The report presented 17 findings that outlined both the opportunities and challenges associated with developing a green steel industry in WA.

It considered two development scenarios: the production of green iron in the form of hot briquetted iron (HBI), and the production of green steel.

In the case of producing 2.8 Mtpa of green steel, the estimated capital expenditure was over $5.1 billion. The energy infrastructure costs were projected to be $15.9 billion, with an additional $2.4 billion for a hydrogen facility. The report suggested that producing green steel could add $56.2 billion to Australia’s GDP, generating $45.6 million in real income and $19.4 billion in taxes.

The report highlighted the prices needed for green steel to be economically viable in WA. The price of hydrogen would need to reach the “stretch” target of approximately US$2/kg or A$3/kg, which is significantly lower than the current price of $7/kg.

“Our state’s abundant renewable energy resources alongside our world-leading iron ore industry puts WA front and centre in the global push towards green steel,” WA premier Roger Cook said.”

“Moving up the green steel value chain will diversify our economy and create more local jobs right across the state.”

Mines and Petroleum Minister Bill Johnston acknowledged that each scenario presented in the report would generate over 1,000 full-time jobs.

“The Cook government now has a comprehensive understanding of the challenges facing the steel industry in its decarbonisation efforts and opportunities for future value adding of iron ore in Western Australia,” he said.

“The transition option of using natural gas has the potential to reduce emissions from iron making by 65% and is technically feasible today. This information can be used to support investment attraction into Western Australia.

“There is increasing interest in Western Australia by the steel industry given the access to our iron ore resources and renewable energy options. Coordinated efforts will be required to secure that investment.”

Given Western Australia’s access to iron ore resources and renewable energy options, there is increasing interest from the steel industry in the region. However, coordinated efforts will be necessary to secure investments and capitalise on these opportunities.