Green Iron & Steel Industry Development

SACOME calls for the South Australian Government to undertake a Green Iron & Steel Sector Supply Chain Study to inform the strategic development of a South Australian Green Iron & Steel Industry.

While the Green Iron & Steel Strategy and Green Iron Opportunity Expression of Interest signal the Government’s policy intent, industry development must be supported by whole-of-supply chain understanding.

The South Australian Government’s Green Iron Opportunity Expression of Interest sets an ambitious ‘green iron by 2030’ target. It aims to build ‘a pathway to develop a direct reduced iron plant and supporting value chain’, with a focus on ‘de-risking the environment for commercial green iron projects to emerge’.

Undertaking a Green Iron & Steel Sector Supply Chain Study is an important step in enabling industry development but industry development of this nature must be underpinned by properly informed planning.
SACOME advocates for requisite strategic planning to be undertaken in a way that allows for coordinated industry development by understanding where and how to best invest in enabling measures against a pre-determined timeline – notionally one that aligns with the South Australian Government’s net-zero objectives.

While the Green Iron Opportunity Expression of Interest sets a vision, delivery on this vision must be informed by full understanding of where bottlenecks in the supply chain will be encountered and the measures required for their timely resolution.

SACOME identifies the need for strategic coordination of supply chain inputs:
Feedstock
SACOME notes that development of a green iron and steel industry is predicated on supply of magnetite as a feedstock to direct reduced iron (DRI) and steel production.
While South Australia has approximately 7.4 billion tonnes of economically demonstrated iron ore, much of this is still at the pre-development stage, and significant capital investment is required to enable both individual project and broader province development.

Rail Infrastructure
Transport of magnetite along the supply chain is fundamental to green iron and steel production.
Greater levels of iron ore production will see increased demand for rail usage and require investments in the rail network to allow its efficient movement to a DRI processing plant or to port.
SACOME members have advised that Green Iron and Steel industry development as contemplated by the South Australian Government’s policy agenda will require upgrade of the Tarcoola to Whyalla rail line to avoid bottlenecks arising through greater levels of rail patronage.

Beneficiation Plant Location
Determining the location of a beneficiation plant – or multiple beneficiation plants – is relevant to decisions about power, water and transport linkages.

Some operators have expressed a preference for locating a pre concentrate dry beneficiation plant either on their mine site or as close to their mine site as possible, reflecting the fact that onsite dry beneficiation will reduce the amount of product they need to transport to the next point in the supply chain. This has impacts on transportation costs associated with their projects and can alter project economics significantly.

Onsite dry beneficiation will require dedicated power transmission lines to the mine site, whereas wet beneficiation will require both dedicated power transmission and water supply to the mine site.
These are significant capital decisions for operators, investors and for government to address as part of the industry development process.

Power Requirements
Power requirements to support development of a Green Iron & Steel Industry must also be included as part of an industry development strategic planning exercise.

SACOME notes that renewable energy and hydrogen are intended to be the ultimate sources of industrial energy in line with positions set out in policies like the State Prosperity Project, Hydrogen Jobs Plan and Green Iron & Steel Strategy.

Securing generation capacity and linking this generation to project sites across the supply chain at a commercially viable price point is as fundamental to green iron and steel industry development, as it is to industry development in general.

SACOME submits that consolidating a State-wide understanding of generation demand relevant to green iron and steel industry development should be a key element of a South Australian Green Iron & Steel Industry Supply Chain Study.

Whyalla Gas Lateral Pipeline
While hydrogen is intended to be the ultimate fuel source for production of Direct Reduced Iron and green steel, gas will be the transitional fuel to bridge the gap between coal and hydrogen in iron and steel production.

Pipeline capacity to Whyalla is insufficient to meet requirements for Direct Reduced Iron (DRI) flagged by operators like GFG; and will be a necessary input for greater levels of green iron and steel production per the aims of the Malinauskas Government’s
Green Iron & Steel Strategy.

Based on consultation with its member companies, SACOME is advised that meeting these production objectives will require an increase in gas pipeline capacity to Whyalla from its present 24 to 80TJ – 120TJ.

This would require construction/duplication of 115km of pipeline from Port Pirie to Whyalla and construction of a compressor station. Additionally, ensuring that gas pipelines are capable of carrying and storing hydrogen is an important consideration for industrial ambitions in Whyalla and the Upper Spencer Gulf and must be part of future-proofing pipeline infrastructure for hydrogen use.

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