SA’s Big Cost Advantage To Green-light Green Iron

SA Gov

South Australia is perfectly placed to lead the global race to decarbonise steel – widely known as the toughest sector to abate carbon emissions – with a landmark new study demonstrating the economic benefits of shipping SA-made green iron to the world.

A collaboration between Europe’s largest seaport authority, the Port of Rotterdam, and Monash University shows South Australian green iron has a 21 per cent cost advantage when compared with shipping its raw components to Europe.

The Green Iron Supply Chain study highlights a generational opportunity for South Australia, demonstrating the viability of a local green iron industry that would see the state capture even more economic benefit from its abundant magnetite resources.

South Australia’s comparative advantages stem from the state’s superior magnetite – the form of iron used in the production of green iron and steel – as well as abundant renewable energy generation and the Malinauskas Labor Government’s investment in green hydrogen power.

The study also points to South Australia’s established electricity networks and ports, its ‘one-window-to-government’ regulatory framework for energy, hydrogen and mineral resource investments, and the proximity of existing infrastructure to magnetite and hydrogen sources.

Energy and Mining Minister Tom Koutsantonis last week outlined the findings of the joint study at the World Hydrogen Summit in Rotterdam, where the State Government delegation liaised with prospective global partners to accelerate the green iron and steel industry in SA.

A formal Expressions of Interest process for companies to partner in developing a green iron industry and supply chain in South Australia opens in June.

The EOI will seek interest from companies to jointly investigate the development of a hydrogen-based direct reduction iron (DRI) plant in South Australia before the end of the decade, as announced earlier this year by Premier Peter Malinauskas.

DRI production can reduce carbon emissions by up to 85 per cent. Savings of this magnitude will be critical in attracting investment from jurisdictions that have carbon adjustment mechanisms in place.

As put by Tom Koutsantonis

Green iron and steel will play a pivotal role in decarbonising the global economy, and in South Australia we have what the world needs to deliver on this.

The world will continue to require steel in a carbon-constrained future, yet the sector contributes to 8 per cent of global emissions.

This Green Iron Supply Chain report confirms that South Australia’s unique natural combination of sun, wind and superior magnetite resources – combined with the state’s early leadership on renewable energy and hydrogen – put us in a strong position to have a critical role in decarbonising global steel production.

But our 21 per cent advantage is not just a number – it’s a statement of intent.

South Australia’s leadership in decarbonisation has already captured the world’s attention. We’ve transformed our renewable energy generation from 1 per cent in 2007 to now around 75 per cent, and we’ve committed to achieving 100 per cent net renewables generation by 2027.

Similarly, our Hydrogen and Renewable Energy Act is setting benchmarks in how to engage communities and provide certainty to industry as the renewable energy sector grows.

Building on our advantages, we’re looking for partners who can help us scale up a commercial industry and supply chain to transform raw iron ore into value-added low carbon exports – meaning new opportunities and more jobs for South Australians.

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