A recent AFR article emphasises the challenges many of Australia’s largest mining companies face as the global steel industry decarbonises. More importantly, the article stresses the importance for Australia to begin investing in Green Steel production to meet the changing demands of the worldwide market and achieve its climate goals.
Australian mining companies lack magnetite production capabilities and incur large transmission costs:
The problem many Australian mining companies are currently experiencing is with their inability to seamlessly transition from mining hematite iron ore deposits to magnetite which is reflected in the lack of supply of required high iron content. As the AFR mentions, “Most of Fortescue, BHP, and Rio’s Pilbara mines do not extract magnetite geology; instead, they mine hematite iron ore deposits.” The magnetite iron ore deposits are particularly important to help facilitate the production of direct reduced green iron (DRI) which as the AFR states, “can then be fed into a renewable-powered electric-arc furnace to make steel with low to zero emissions.”
The AFR goes on to mention that transitioning the Pilbara to a green iron export industry requires a significant amount of investment in electricity generation, stating that “Establishing a green iron export industry in Australia could require additional green iron technology investments of up to $30 billion by 2050 and 234 [terawatt hours per year] of electricity generation on top of that required to transform domestic iron making and steel making,".
Benefits of making the transition for the Pilbara mining region:
Whilst this is the case, the AFR does suggest transitioning to a green iron ore export industry will have many long-term benefits stating that “the Pilbara has vast renewable energy resources, and in terms of land access to build renewable projects, the Pilbara is less densely populated” and thereby allowing Australia to “ prevail in green iron from an abundance of cheap, carbon-free energy”.
"The technological advancements mentioned above will secure the future for Pilbara ores that have sunk infrastructure that enables low-cost operations."
Robert Stein, Research Analyst, CLSA
In summation, the shift towards green steel presents both challenges and opportunities for the Australian iron ore industry. While the industry must adapt to these changes, it has the potential to become a leader in the production of green steel, which could provide significant economic benefits in the long run.
Read the complete AFR article here
Constance Iron Limited
Constance Iron Limited is an Australian-based magnetite iron ore company focused on the development and production of iron ore assets.
The company operates across multiple jurisdictions with a primary interest in near-term and operating mines. Constance Iron has an experienced Board and Management team that have assembled a group of high-quality projects with potential to position Constance Iron as a high-tonnage supplier of premium iron ore for global markets.
