The state’s peak resources lobby group has welcomed the federal governments new green iron funding package but urged more focus on WA as the “sensible” choice for green iron industries.
The state’s peak resources lobby group has welcomed the federal governments new green iron funding package but urged more focus on WA as the “sensible” choice for green iron industries.
The federal government today announced the new $1 billion Green Iron Investment Fund to boost green iron manufacturing and supply chains, $500 million of which will be used to support the transformation of Whyalla Steelworks to produce green iron.
Those funds came as part of a $2.4 billion support package for the embattled Whyalla Steelworks, which has been under pressure to pay debts to creditors, estimated to be in the tens of millions of dollars.
Yesterday, the South Australian government rushed through legislation to allow to it to place steelworks owner GFG Alliance into administration.
SA premier Peter Malinauskas said he would not allow a taxpayer funded bailout of GFG.
“Now that the steelworks is no longer under the control of GFG, the state government can partner with the federal government and make the long-term investments necessary to secure the future of Whyalla and Australian steel making,” he said.
In a response to the funding, The Chamber of Minerals and Energy WA chief executive Rebecca Tomkinson said it was pleasing to see the federal government support the community of Whyalla – with administrators KordaMentha estimating the funding would help preserve 4000 jobs.
But, she said, WA was the sensible choice for funding through the new Green Iron Investment Fund.
“Western Australia is already the iron ore capital of the world. It’s well established that we are best placed to become a significant manufacturer of green iron,” she said.
“As the world’s leading iron ore producer, we have strong trading relationships with steel mills across Asia that are looking to decarbonise their operations.”
“Many of our members have also already invested significant time and money researching and developing prospective green iron pathways, including through partnerships with universities.”
In December, the WA government announced Kwinana would be the location for Australia's largest ironmaking electric smelting furnace.
That followed Australia's largest steelmaker, BlueScope, and its two largest iron ore producers, BHP and Rio Tinto, announcing earlier last year they would form the NeoSmelt consortium to develop the pioneering plant, with electric smelting the key to producing green iron and steel.
Woodside announced it would join the consortium in December as an equal equity partner and energy supplier.
The state government committed $75 million towards the project.
The CME released its green iron report in December, and found large-scale production of green iron in WA could reduce global emissions by 1.2 per cent by 2050 – which the group claims would effectively offset every tonne of CO2 currently produced in Australia.
The research also said it would generate $74 billion in economic value and support 19,000 jobs.
In a pre-budget submission in January, CMEWA recommended the federal government develop a green iron production tax credit in line with the hydrogen production tax incentive to boost decarbonisation initiatives.
“It is vital that (WA iron ore producers) are now prioritised for support through this new fund to accelerate the commercialisation of new technologies and processes suitable for WA iron ores since this is the first step in realising green iron opportunities in Australia,” Ms Tomkinson said.
Ms Tomkinson also once again took aim at lagging approvals and excessive red tape.
“It is equally important the federal government commits to ensuring Australia gets the fundamentals right to maintain and expand our existing mining operations,” she said.
“This means speeding up project assessments driving down energy costs, providing certainty over environmental reforms and repealing productivity-killing industrial relations changes.
“There can be no downstream processing – including green iron – without the mines that supply the raw materials.”
Fallout from the Whyalla saga continues, with the South Australian government choosing to defer plans for a $600 million hydrogen plant at Whyalla.
It’s a move The Green said they supported – although they were less welcoming of the $2.4 billion package.
“It is essential to maintain sovereign steelmaking capacity in our country,” Greens senator Sarah Hanson-Young said.
“However, the handover of public funds – of at least $2.4 billion – to help this should result in an equity stake, not just an untied grant or subsidy to the private sector.
“The days of corporate welfare are over. Any investment in Whyalla needs to buy a stake in the operation on behalf of Australian taxpayers.”
A joint statement from the Australian Workers’ Union, Australian Manufacturing Workers’ Union, Electrical Trades Union and Maritime Union of Australia welcomed the $2 billion package.
“Whyalla supplies three-quarters of Australia’s domestic steel supply. Without it we would be beholden to foreign nations for the building blocks of our society.,” AWU National Secretary Paul Farrow said.
“The Whyalla steelworks is a vital piece of national infrastructure, and yet our members have endured years of anxiety wondering if their jobs would survive administration and restructuring. It's time to get off this merry-go-round.
“Whyalla's workers perform a vital role for the nation and they deserve certainty and stability.”
