Australia could lose its leading global iron ore role to Africa, Brazil, and Europe without stronger efforts to fund Pilbara green iron plans, according to Fortescue boss Dino Otranto.
Australia could lose its leading role in the global steel supply chain to Africa, Brazil, and Europe without stronger government efforts to fund Pilbara green iron plans, according to Fortescue boss Dino Otranto.
The Fortescue chief executive warned growing pressure on China to decarbonise to maintain its own dominant position in the market could have dire implications for Australia should we fail to establish a green iron industry.
Fortescue’s concerns were outlined in a submission to a Senate probe into the federal government’s Future Made in Australia Bill, which has earmarked $22.7 billion over 10 years for net-zero focused industries.
Mr Otranto said the Pilbara risked losing its iron ore export market dominance if it continued to load ships with iron ore graded 62 per cent and below.
“Fortescue is concerned that without the Australian Government, WA Government and industry uniting to develop a focused and funded green iron plan for the Pilbara, the nation runs the risk of losing its long established and high earning place in the global steel supply chain,” he said.
“This would have a significant impact on the Australian economy and state and federal government income with little chance of replacing the lost revenue.
To secure this industry and sustain and optimise the contributions it makes to the Australian economy well into the future, we need to transition from low grade haematite production to high grade green iron production.”
Mr Otranto said while many green iron technologies were proven, they had yet to be tested at a commercial scale.
Fortescue is close to breaking ground on its US$50 million Christmas Creek green iron commercial plant trail, which would churn out a 95-per cent grade pig iron product using green hydrogen as a fuel source.
The Andrew Forrest-helmed company aims to produce “meaningful” quantities of green iron using Pilbara haematite by the end of 2025, Mr Otranto said.
“Fortescue will also invest in a 1-2mtpa green iron plant that combines green hydrogen reduction and electric smelting furnace to demonstrate the method at commercial scale.
That product would be usable by electric arc furnaces which need to be fed by iron ore with a grade of at least 65 per cent, which is above most Pilbara ores used in coal-fired furnaces.
Fortescue recommended incorporating community benefit reporting principles into the Bill to limit delays, ensuring regulatory duplication was removed, and that no funds be allocated to fossil fuels, including carbon capture and storage or hydrogen production unless it was done using renewable energy.
The miner also backed China as a funding source for green iron projects and urged the federal government to “find a balance” between national interest and supporting foreign investment.
Mr Otranto will address a Business News breakfast on Tuesday morning at Crown Perth.
