The potential for Western Australia to emerge as a hub for green steel manufacturing is substantial, but it requires significant capital investment, according to a State Government report.
Led by the Minerals Research Institute of WA (MRIWA), the Green Steel Opportunity report outlines the State’s capability requirements for green steel manufacturing, including increasing the quality of ore feedstock for steelmakers and maximising use of WA’s magnetite ore reserves.
Minister for Mines and Petroleum Hon Bill Johnston says the report gives the Government 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”.
"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 WA,” he says.
"There is increasing interest in WA 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."
The report identifies five “development pathways” that iron ore can be used for green steel manufacturing:
- Green iron ore (hematite and magnetite concentrate) mining for export.
- Green pellets production and export using renewable hydrogen.
- Natural gas to produce hot briquetted iron (HBI), which is then used to produce green pellets.
- Producing HBI from green pellets, using renewable hydrogen to produce both the pellets and the HBI (green iron in the form of HBI).
- Domestic green steel production using renewable energy.
Challenges and opportunities
The most significant challenge facing green steel production is the large stimulus investment required in renewable hydrogen, including renewable energy-powered iron ore, iron and/or steel projects.
Other barriers include the high price of hydrogen and access to land for processing infrastructure.
For the State to realise this green steel manufacturing opportunity, the report says four “critical success factors” are required:
- Resources – access to physical iron ore required to produce steelmaking feedstock for the green steel value chain. WA’s abundance of iron ore provides a platform for this opportunity.
- Energy – access to renewable energy and having the capacity to convert it into renewable hydrogen. Progressing through a natural gas-based direct reduced iron (DRI) (cheaper production process than traditional blast furnace (BF) processes) pathway also requires natural gas access.
- Infrastructure – access to large-scale infrastructure to connect resources to processing plants and global markets.
- Technology and enterprise – the technology and processes required to produce greener iron and steel continue to evolve. Securing access to research and the capacity to drive commercial outcomes are central to WA’s green steel opportunity.
“As demonstrated in the report, a small scale 4.8 million tonne per annum (Mtpa) vertically integrated magnetite HBI plant in the Pilbara generates taxation benefits in the order of $31.7 billion to Australians during construction and operations through to 2050,” says Johnston.
"It is estimated that the 4.8Mtpa plant would increase employment in the Western Australian iron ore sector by 1,700 full-time employees.”
CCIWA’s Industry Capability Network can connect your business with suppliers with the right capabilities for your project. Contact the ICNWA team on (08) 9365 7623 or by email at [email protected].