BlueScope has reported a record half-yearly profit of $1.64 billion and has committed to the next phase of its biggest infrastructure project in Australia.
It's the company's highest first-half profit since it was demerged from BHP in 2002 to be a standalone steel maker.
Mark Vassella, BlueScope's managing director and chief executive, said the business was in the right position to take advantage of the current economic climate.
"So, we've been the beneficiaries of that demand profile and pricing, so we have had some tailwinds," Mr Vassella said.
Mr Vasella revealed the result while visiting the company's head office in Kansas City, Missouri, USA, as Bluescope prepares to open the expansion of its North Star operations in the United States.
The company's board has approved an interim unfranked dividend of 25 cents per share. It will expand its buyback program up to a further $700 million over the next 12 months.
Port Kembla number 6 furnace moves to feasibility stage
For the company's Australian operations, the result means it will now begin work on a feasibility study to reline the mothballed number 6 blast furnace at its Port Kembla plant.
Mr Vasella said Bluescope was preparing to decommission the number 5 blast furnace in four years.
"We have a large team working on what the next investment in number 6 will look like, which will give us another 20 years of iron making," he said.
Last year, the NSW government declared the $1 billion upgrade a project of Critical State Significant Infrastructure.
"We are focusing very heavily on ensuring we allow ourselves to adopt the latest technologies, particularly in relation to carbon abatement," Mr Vasella said.
"It will really be a bridge that we need to see us through to new technologies that are low emissions steelmaking technologies."
Detailed design and execution will be progressed across the next 12 months at a cost of approximately $50 million.
Bluescope's financial report suggests it will commit $120 million during FY2022 on long lead time items, which are critical for the availability of the number 6 furnace.
Last year the company signed memorandums of understandings with Rio Tinto and Shell to trial hydrogen and investigate direct iron reduction technologies.
The projects will focus on piloting an industrial scale 10-megawatt hydrogen electrolyser, hydrogen direct iron reduction furnace and iron melter, all powered by renewable electricity.
The work will also be part of developing the Illawarra as a hydrogen hub.
Along with the result, the company said it was the first steelmaker in the southern hemisphere to be awarded a ResponsibleSteel site certification.
