Report: Forging our Future

10 requirements to build an export-scale green iron industry in Western Australia

Forging Our Future sets out the ten requirements needed to build a green iron industry in WA quickly.

Standing up an export-scale green iron industry in Western Australia will safeguard Australia’s iron export industry, create tens of thousands of secure jobs, and significantly reduce global emissions. But it won’t happen by chance.

Australia becoming the world’s top green iron producer will require the Commonwealth and Western Australian governments, industry and workers to apply the lessons of how rapid industrialisation has been achieved in the past.

Western Australia is the world’s largest iron ore producer, mining more than 860 million tonnes of iron ore in 2023 equivalent to 39% of global supply.1 Royalties from the iron ore industry account for 85% of WA’s royalty revenue2 and for a quarter of the WA government’s general revenue. Nationally, iron ore is Australia’s single largest export, worth $136bn in 2023 – 20% of Australia’s exports by value3 and 33% of resource and energy commodity exports in 2023-244.

However, iron ore mining, processing, and manufacturing into iron and steel products is extremely emissions intensive. Global steel-making emissions contribute 7-9% of total global emissions in any given year.5 A net zero world will need to have almost completely decarbonised steel production. Because of this, international steelmakers are investing in new non-WA supplies of ore as the bulk of what is exported from the Pilbara is not compatible with the predominate existing green steel technologies.

The world must urgently decarbonise, but this puts Australia’s largest export industry, in its current form, at risk. Without policy support and targeted investment by the Commonwealth and Western Australian governments, the backbone of our export economy is likely to collapse. If the WA iron ore industry isn’t properly prepared for the fast-arriving low-emissions economy, Australians risk significantly lower standards of living and our country becoming a poorer place.

Almost every major iron and steel producer in the world today was initially established as a state-owned enterprise with a clear national objective underpinning their creation. The speed and scale of industrial development required to reduce emissions and secure a green iron industry in Australia means we need to look at what has worked in the past and build on those successes to meet the challenges of today.

Australia becoming the world’s top green iron producer will require the Commonwealth and Western Australian governments, industry and workers to apply the lessons of how rapid industrialisation has been achieved in the past. We have to partner together to achieve scale quickly.

If we fail to do so, Australia’s prosperity and continued high standards of living are at risk, and the world will likely fail to keep global warming below 1.5C.

Importantly, we show how the establishment of a major new joint venture, the Australasian Green Iron Corporation, as a 21st-century partnership between the Western Australian and Commonwealth governments, iron ore miners, the steel industry, and our key trading partners is the fastest and lowest-risk route to a large- scale green iron industry in WA.

Forging Our Future includes 3 complementary scenarios that can enable the building of a large- scale green iron industry:

1. Domestic green iron consumption

The first scenario sees green iron production commence in 2026 with a goal to provide 100% green iron for Australia’s steel production within 10 years. This will create an immediate green iron market and demonstrate Australia’s capacity to produce green iron for investors and trading partners.

2. Green iron exports for South Korea, Japan and Taiwan

Starting with initial green iron exports in 2028 to South Korea, Japan and Taiwan. This scenario builds to meet 70% of the green iron demand of our renewable energy- constrained trading partners by 2040.

3. Top and tail China’s green steel transition

Starting exports to China in 2033 will enable Australia to help provide top and tail green iron exports that will improve China’s capacity to decarbonise its domestic steel industry, the largest in the world.

If delivered in parallel, these three scenarios would:

Produce 122 million tonnes of green iron per year by 2040 from approximately 40 DRI plants with an average capacity of 4 mtpa

Over the 14 years produce:

$380bil in GDP ($27bil per year)

$350bil in real income ($25bil per year)

$167bil in Commonwealth and WA state taxation, ($11.9bil per year)6

Develop a new Western Australian export industry worth $340.2B ($76bil in exports in 2040)

Create 24,000 ongoing jobs in WA, with an additional 150,000 construction jobs created over 14 years – or an average of 11,000 full-time construction jobs per year

Drive down emissions from Australia’s and our region’s steel industry with a reduction of 274 MtCO2-e of emissions per annum in 2040 – equivalent to half of Australia’s annual national emissions.

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