UK billionaire Sanjeev Gupta's GFG Alliance will phase out coal-based steelmaking at its Whyalla steelworks in South Australia, signing a supply contract for a $485 million low carbon electric arc furnace.
The deal is being hailed as another major step in the reindustrialisation of the state's Upper Spencer Gulf region via decarbonisation.
The investment by GFG's Liberty Steel arm will take place alongside the SA government's Hydrogen Jobs Plan.
The new Danieli furnace will lift steelmaking capacity at Whyalla from 1 million to 1.5 million tonnes per year, supporting growth in Whyalla's permanent workforce, Premier Peter Malinousakas says.
"Whyalla and the broader Upper Spencer Gulf has enormous potential to lead the world in green hydrogen production, helping decarbonise industry across the planet," he said in a statement.
"That's why my government has selected Whyalla to be the home of our Hydrogen Jobs Plan, which will see the world's biggest eletrolyser and hydrogen power station.
"We look forward to working with key industrial players, including Liberty, to take full advantage of the opportunity to reindustrialise the Upper Spencer Gulf on the back of this."
Engineering work on the furnace is already advanced and construction is expected to be completed in 2025 replacing the site's existing coke ovens and blast furnace.
Liberty has also engaged global equipment suppliers for the installation of a 1.8 million tonne per annum direct reduction plant, which would process local magnetite ore to produce low-carbon iron.
The plant would initially use a mix of natural gas and green hydrogen, before fully transitioning to green hydrogen.
