Counted among the nation’s biggest polluters, South Australia’s Whyalla steelworks will replace coal-based production with a half-billion dollar electric arc furnace capable of slashing emissions by 90 per cent.
Owners Liberty Steel say the phase-out will also lift steelmaking capacity by half to 1.5 million tonnes annually, build on the 3500 jobs it already provides and place the industrial port city “at the heart of a global revolution.”
The deal is hailed as a major step in the reindustrialisation of SA’s Upper Spencer Gulf.
The region is also the site of the state government’s planned $600 million low-carbon precinct, with enormous potential to lead the world in green hydrogen production, helping decarbonise industry across the planet, Premier Peter Malinauskas said.
“That’s why my government has selected Whyalla to be the home of our Hydrogen Jobs Plan, which will see the world’s biggest electrolyser and hydrogen power station,” he said.
Liberty’s founder, UK billionaire Sanjeev Gupta, said the signing of a supply contract for the 160-tonne, $485 million low-emissions Danieli furnace would end coal-based steelmaking at Whyalla within three years.
“Today marks the beginning of a new era … moving (steelmaking) from being the most polluting of all industries to among the cleanest and greenest,” Mr Gupta said.
“Through the steps we’re taking to install state-of-the-art, low-carbon iron and steelmaking technologies here in Whyalla we will not only support Australia’s climate ambitions but help to decarbonise steel supply chains globally.”
Federal Energy Minister Chris Bowen was quick to claim the announcement as evidence of confidence in the government’s central climate change policy tool.
“The passage of the … safeguard mechanism reforms provides critical industries like steelmaking with the certainty needed for major investments in decarbonisation, helping to future-proof thousands of onshore jobs and ensuring a future made in Australia,” he said.
Mr Gupta said Whyalla had some of the best conditions to make low carbon iron and steel anywhere in the world.
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, to process local magnetite ore and avoid highly polluting traditional blast furnace methods utilising coke.
The plant would initially use a mix of natural gas and green hydrogen, before fully transitioning to green hydrogen.
Liberty said late last year it planned to quadruple its Whyalla mining and steel production workforce and boost its extraction of magnetite more than 10-fold to produce low-carbon iron.
It purchased the SA plant from Arrium after it went into voluntary administration in 2016 with almost 10,000 workers on its books and debts of more than $2 billion.
In January, Gupta-chaired and GFG Alliance-owned Liberty placed almost 450 UK jobs at risk, announcing plans to idle production at three plants and restructure at others.
It employs 35,000 workers globally in some 200 locations, including 6500 across Australia.
The Australian Conservation Foundation listed Whyalla Steelworks at number 10 in a 2022 report into Australia’s highest polluters based on five years of data.
– AAP
