Latest news with #greeniron
ABC News
4 days ago
- Business
- ABC News
Green iron didn't dominate headlines during Albanese's China trip, but it was a key discussion with Xi
Prime Minister Anthony Albanese was trying to do a Bob Hawke with his trip to China last week. In 1984, Hawke became the second Australian prime minister to visit China, after Whitlam in 1973, and planted the seed that became the Australia-China iron ore joint venture. It resulted in the Channar iron mine in the Pilbara three years later. Liberal prime minister Sir Robert Menzies was actually called "Pig Iron Bob", but not because he went to China to drum up business. It was because in 1938 the wharfies at Port Kembla went on strike to stop the SS Dalfram loading pig iron destined for Japan, and which workers argued could be used to make weapons. Menzies, then attorney general, tried to stop the strike, arguing wharfies should not be running Australia's foreign policy. Perhaps today's prime minister wouldn't mind being known as "Green Pig Iron Ant" because he is trying to get Chinese funding for the crucial next phase of Australia's iron ore industry: green iron. Most of the past week's publicity blaze for Albanese's China trip was understandably about Australia's place in the contest between America and China, as well as some inevitable pandas, but an event last Monday was arguably the most important. It was a "Steel Decarbonisation Roundtable", with Australia's big four iron ore producers and all the big Chinese steel mills. The focus on green iron and steel decarbonisation on this China trip may have been influenced by Ross Garnaut, Hawke's economic adviser in 1984, and Rod Sims, former head of the ACCC. The think tank they started, called The Superpower Institute, produced a report in May called "A Green Iron Plan for Australia". The report tells the government how to build a green iron industry in Australia — that is, one that uses renewable energy and hydrogen rather than fossil fuels like coal or natural gas, and reduces carbon dioxide emissions. Garnaut and Sims point out that "most major economies have committed to achieving net-zero between 2045 and 2070. The timeline and trajectory of global decarbonisation may be uncertain, but the direction is clear: fossil fuel demand will contract in the coming decades." They say that if green iron replaces iron ore, it could generate "up to $386 billion a year" in export income for Australia, as well as providing a hedge against the decline of fossil fuel exports. To do it, tax credits worth $170 per tonne are needed to offset the "market failure" caused by the lack of an international carbon price. The core proposition of the Garnaut-Sims report is that Australia can be a renewable energy superpower, but it can't be traded in the way fossil fuels are — it needs to be converted into zero carbon products that are exported, and they focused on green iron because they think it should be first cab off the rank. The iron used to make steel is now made by removing the oxygen from iron ore, which is ferrous oxide (iron and oxygen). That's done by heating the ore with coal (carbon) in a blast furnace; the carbon binds with the oxygen to form carbon dioxide, which goes into the atmosphere, leaving behind pig iron. The pig iron is then smelted to get the carbon content down from about 4 per cent, which makes it brittle, to between 0.02 per cent and 2.1 per cent, which is steel. To make "green iron" out of iron ore, hydrogen is used instead of coal. It combines with the oxygen to form water. You can't use the same blast furnaces, so a process called direct reduction iron (DRI) must be used instead. DRI can use gases to remove the oxygen from the iron ore, but the temperatures aren't hot enough to remove the other impurities in iron ore, called gangue, so they have to augment the process with electric smelting. Bluescope, BHP, Rio Tinto, Mitsui, and Woodside are currently in a joint venture project called NeoSmelt, funded by the Australian Renewable Energy Agency (ARENA), to develop an electric smelting process that will remove the gangue. In the Future Made in Australia package in the 2024-25 Federal budget, the government introduced a Hydrogen Production Tax Incentive (HPTI) of $2 per kilogram — that is, hydrogen producers would get a tax credit of $2 for every kilogram of hydrogen they made. Each tonne of pig iron requires 55kg of hydrogen, so the HPTI would give a tax credit of $110 per tonne for the iron. The Garnaut-Sims team at The Superpower Institute has calculated that to create a green iron industry, the "subsidy" needs to be $170 per tonne. They say that figure represents the cost to the planet of the carbon dioxide released by the usual method of making iron with coal, and it's based on the European carbon price. Basically, it's a reverse carbon price — instead of taxing iron made with coal, you subsidise iron made with hydrogen. The way The Superpower Institute put it in the green iron paper published in May is that the lack of a carbon price is a market failure that disadvantages Australian iron producers: "This distorts the international market for iron products and creates an inefficient advantage for fossil-fuel-based products. "This market failure is a major reason that there is a cost gap between the international price of carbon-intensive iron products and the estimated production costs of Australian green iron. The cost gap for most producers is substantial." The 2024-25 budget provides $6.7 billion over 10 years for the Hydrogen Production Tax Incentive, which, at $110 per tonne, would do 6 million tonnes of iron ore a year. Last year, Australia exported 898 million tonnes of iron ore, of which 758 million went to China. If all of that was replaced by green iron that was given a tax credit worth $170 a tonne, it would cost more than $100 billion and completely blow up the government finances. Obviously, by estimating a cost of $6.7 billion, the government doesn't think there'll be much of a green iron industry in the first 10 years, which is probably true. This is a long-term project, but you have to start somewhere, and Albanese is starting in Shanghai with the Chinese steel mills. After the Steel Decarbonisation Roundtable, Albanese held a press conference alongside Andrew Forrest of Fortescue Metals, Geraldine Slattery of BHP Australia, Kellie Parker of Rio Tinto Australia, and Gerhard Veldsman of Gina Reinhart's Hancock Iron Ore. There was just one question about steel decarbonisation about halfway through the press conference before the journalists got back to the four Ts — Trump, tariffs, trade, and Taiwan. Someone asked the prime minister how much money his government was prepared to put into building a green iron industry in Australia. In reply, he waffled and didn't answer, for the obvious reason that the money budgeted for is an embarrassing fraction of what's going to be needed, and no more is available. Which is why he was in Shanghai trying to get the Chinese steel mills to pay for it. Alan Kohler is a finance presenter and columnist with ABC News and also writes for Intelligent Investor.
Yahoo
16-07-2025
- Business
- Yahoo
BHP says too costly to build Australian green iron industry as PM seeks China collaboration
MELBOURNE (Reuters) -Major miner BHP has said it is too costly for Australia to build a "green iron" industry after the country and China agreed this week to jointly work to decarbonise the steel supply chain, responsible for nearly a tenth of global emissions. BHP Australia chief Geraldine Slattery, who attended business round tables with Australian and Chinese industry leaders in China this week, said that costs to produce the low carbon steel product "simply do not stack up". "Even with generous policy support, the cost of production (in Australia) would be double that of the Middle East and China – and customers many thousands of kilometres away," Slattery said in a social media post late on Tuesday. Slattery and other CEOs of mining companies accompanied Australian Prime Minister Anthony Albanese on a visit to China this week, where he said the two countries should cooperate more closely on green steel. The lack of enthusiasm from the world's biggest miner, which said its strategy was "not to produce green iron ore or steel ourselves", in the wake of the talks came as a reality check for Australia's ambitions. Australia supplies about 60% of China's iron ore needs but its supply is too low-grade to be directly processed into steel with renewable energy, so it needs an additional processing step. When this step is undertaken with hydrogen made from renewable energy or with biomass instead of coal, the resulting product is called green iron, a low-carbon base for making green steel. Such processes are not expected to become widely commercial until next decade. Australia has been striving to develop a minerals processing industry to diversify from its raw material exports that bring in around A$370 billion ($242 billion) a year, but it has been hamstrung by high power prices and labour costs. In February the government allocated A$1 billion to support the manufacture of green iron and its supply chains. BHP, Rio Tinto and Bluescope Steel agreed in December to work on developing a pilot plant to produce low-carbon iron using renewable power and direct reduced iron technology in an electric smelting furnace (ESF), with a potential start date of 2028. Fortescue also has a green iron project underway, and is set to produce green iron from a pilot plant this year. ($1 = 1.5319 Australian dollars)
Yahoo
16-07-2025
- Business
- Yahoo
BHP says too costly to build Australian green iron industry as PM seeks China collaboration
MELBOURNE (Reuters) -Major miner BHP has said it is too costly for Australia to build a "green iron" industry after the country and China agreed this week to jointly work to decarbonise the steel supply chain, responsible for nearly a tenth of global emissions. BHP Australia chief Geraldine Slattery, who attended business round tables with Australian and Chinese industry leaders in China this week, said that costs to produce the low carbon steel product "simply do not stack up". "Even with generous policy support, the cost of production (in Australia) would be double that of the Middle East and China – and customers many thousands of kilometres away," Slattery said in a social media post late on Tuesday. Slattery and other CEOs of mining companies accompanied Australian Prime Minister Anthony Albanese on a visit to China this week, where he said the two countries should cooperate more closely on green steel. The lack of enthusiasm from the world's biggest miner, which said its strategy was "not to produce green iron ore or steel ourselves", in the wake of the talks came as a reality check for Australia's ambitions. Australia supplies about 60% of China's iron ore needs but its supply is too low-grade to be directly processed into steel with renewable energy, so it needs an additional processing step. When this step is undertaken with hydrogen made from renewable energy or with biomass instead of coal, the resulting product is called green iron, a low-carbon base for making green steel. Such processes are not expected to become widely commercial until next decade. Australia has been striving to develop a minerals processing industry to diversify from its raw material exports that bring in around A$370 billion ($242 billion) a year, but it has been hamstrung by high power prices and labour costs. In February the government allocated A$1 billion to support the manufacture of green iron and its supply chains. BHP, Rio Tinto and Bluescope Steel agreed in December to work on developing a pilot plant to produce low-carbon iron using renewable power and direct reduced iron technology in an electric smelting furnace (ESF), with a potential start date of 2028. Fortescue also has a green iron project underway, and is set to produce green iron from a pilot plant this year. ($1 = 1.5319 Australian dollars) Sign in to access your portfolio
Yahoo
15-07-2025
- Business
- Yahoo
Athena Resources joins Mid West green iron project in Western Australia
Athena Resources has agreed to become a foundation partner with Warradarge Energy and Fenix Resources to establish the Mid West green iron project in Western Australia's mid-west region. Athena's role will initially involve providing ore samples from its Byro magnetite project to trial suitable green iron technologies, with the potential to supply high-grade magnetite concentrate for the project, which aims to produce green iron, a sustainable product made using carbon-neutral energy sources such as green hydrogen instead of fossil fuels. This method can reduce carbon emissions by up to 90% compared to traditional steel production processes. The parties have signed a binding memorandum of understanding to collaborate on planning and establishing the project. The new company, Mid West Green Iron, will be formed with equal shareholdings between the parties to serve as the project development vehicle. The Byro magnetite project is capable of producing a 70% Fe grade concentrate, making it ideal for green iron applications. Athena managing director and CEO Peter Jones stated: 'The quality, scale, ocation and metallurgy of the Byro magnetite project [have a] unique ability to provide the ultra-high-grade concentrate products required for a regional green iron development. Warradarge Energy has a similar regional focus and a synergistic scaled development plan for their Warradarge green hydrogen project in the Midwest. Fenix, Athena's largest shareholder, has the regional logistics solutions and balance sheet to support future project development and management of a green iron project. 'Athena's primary focus remains the development of the company's 100% owned high-quality Byro magnetite project. Partnering on local green iron opportunities is an obvious opportunity for Athena to develop a future high-value market for our iron products in addition to the obvious export opportunities.' The Mid West green iron project will be developed in three stages: validation, demonstration and commercial production. The validation phase, expected to conclude by the end of 2026, will involve testing magnetite concentrate samples from Athena's Byro magnetite project. The demonstration phase will see the creation of a small-scale green iron plant, with the possibility of further partnerships and funding agreements. Successful demonstration will lead to the development of a full-scale production plant, with the potential to include additional project partners. "Athena Resources joins Mid West green iron project in Western Australia" was originally created and published by Mining Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
News.com.au
01-06-2025
- Business
- News.com.au
Bulk Buys: Calls for Aussie green iron grow, but we're missing the crucial ingredient
Green iron has become a major talking point in Australian political circles But the biggest handbrake on the nation-building industry could, ironically, be Australia's raw materials Cyclone Metals is blazing a trail in the space at Canada's Iron Bear project Recent weeks has seen a re-emergence of a long-running debate in Australian mining and the political landscape around it. Do we continue to dig it and ship it, selling our iron ore and coal to China in a network that makes us the quarry for the world's dominant steelmaker? Or can we revive a long crippled manufacturing sector at home, saving the world from an industry responsible for 8% of global carbon emissions by becoming producers of green iron at home. One barracker, the Rod Sims chaired Superpower Institute, claimed in a report last week that we could turn the $120bn iron ore export industry into a $386bn green iron export sector by 2060. They've called for government intervention to make it happen. That includes a production tax credit to supplement a proposed credit designed to make green hydrogen production $2/kg or below, equivalent to a carbon price of $170/t. Other recommendations are to support shared infrastructure, a green hydrogen certification scheme, grants that can support 15% of capital cost on top of an already announced $1bn green iron investment fund, up to $500m for projects producing 0.5Mt of steel or more a year, and a host of more general recommendations to support global carbon pricing initiatives. Industry backers The push for domestic green iron has come from business quarters as well, notably Andrew Forrest and his iron ore giant Fortescue (ASX:FMG), which is building a 1500tpa pilot plant at its green energy hub at Christmas Creek, at the same time as it dials back investments in its much touted hydrogen division amid a backdrop of economic uncertainty. Forrest himself has laid out warnings that Australia's iron ore exports could be at risk of losing their crown as ore grades slide and high-grade African deposits like Simandou come online. It's a curious position given Fortescue' own iron ore, sans its Iron Bridge magnetite mine, is among the lower grade products on the market, with some variations. Lower grade iron ore can work in concert with higher grade products in the blast furnaces that dominate the steel market in China and emerging player India, since it is typically blended to reach an optimal blend for the steel mill, based on market prices for steel and various inputs including iron ore and coal. China has stated its intention to reduce emissions from the steel sector, regularly promoting capacity swaps that involve the retirement of older factories for newer ones with better emissions profiles. It has largely done that via the development of electric arc furnace plants that need scrap steel to operate. There are some limitations there – recycled steel isn't great for high-end products like cars or high-tech equipment, while blast furnace lives remain relatively young. The plants, which use coal as the reductant to convert iron ore into crude steel, will remain in operation for decades yet. The easiest way to reduce steel emissions in billion tonne a year producer China is therefore higher iron ore grades with lower impurities, which require less coal and energy to produce the same steel tonne. To really curb emissions you need a direct reduced iron plant, which tends to operate with natural gas as the reducing agent. Theoretically, this process could be emissions free if that gas can be swapped out for hydrogen, something which has been studied for a while in Europe. But there's a bigger limitation. Australia has great stores of natural gas and abundant wind and solar resources to power a hypothetical hydrogen production process. However, it's the very specific grade of iron ore needed to produce DRI steel that will be the blocker. Australian iron. ore producers ship hematite, which has a high (but in the Pilbara's case declining) grade in the ground. But it is magnetite concentrates, which need to be beneficiated to deliver higher grades with lower impurities to the market, that are key for DRI. "With abundant high-grade iron ore resources and processing facilities, countries like Brazil, Canada and Sweden are better positioned for this transition. If it wants to remain competitive, Australia must focus on developing its magnetite iron ore sector," IEEFA energy finance analyst Sorough Basirat warned. "Over the past two decades, several large-scale concentrate plants have been launched to supply high-grade feedstock, along with two smaller-scale pelletising operations. Despite significant investment, however, these projects have often been plagued by delays, budget blowouts and operational setbacks. "Australia must act swiftly to remain competitive. Green iron is more critical to Australia than to any other country, given that iron ore is its leading export and that the country is the world's largest iron ore exporter. "The clock is ticking for Australia. Major miners must accelerate their efforts and adopt viable solutions quickly, or Australia risks missing out on this once-in-a-generation opportunity." Global potential That doesn't mean there aren't already Australian companies waking up to these changing tides. Cyclone Metals (ASX:CLE) this year sewed up a deal for Brazil's Vale, producer of around 60% of the iron ore globally suitable for DRI steelmaking. In recent times DR pellets assessed by Fastmarkets have nabbed a premium of around US$50/t over the prevailing price of 65% Fe iron ore, which itself runs a premium to the commonly quoted 62% Fe price – the latter is currently US$95.80/t. Cyclone Metals owns the 16Bt Iron Bear magnetite complex in Canada's Labrador Trough, one of the few places known to produce magnetite of the purity required to have DRI potential. With Vale in line to spend US$138m proving it up for an eventual 75% stake, it's one of the few deposits on the ASX with genuine potential to join the ~125Mtpa market for DR grade iron ore. "We've got a resource and we've done variability test work, so we've got results which for all intents and purposes is the easiest resource to upgrade to the DR grade that we're aware of," Cyclone CEO Paul Berend said. "(Rio Tinto's) IOC has got something a bit similar and they're about 250km from us, but they're much, much smaller in size and Vale is able to make DR pellets from much lower grade material from their southern system." That is proprietary to Vale, something Berend says shows developing DR grade iron ore projects in Australia is not outside the realm of possibility. But Iron Bear's mineralogy has given the project a leg up. Unlike blast furnaces, where impurities are extracted and separated in a slag, DRI plants need extremely low silica levels in their feedstocks. "When you see a silica floating below 1.5% you're getting into the zone. The Fe grade of a pellet is around 66% because you add things into pellets, you add bentonite and other stuff, binders," Berend said. "The Fe grade goes down, but it's misleading. It's the concentrate that you need to look at. "And even if you do get a concentrate, which has Fe and the silica which are the two things that you need to worry about, you still have to be able to get to the compression strength and the porosity, which not all orebodies, and enable you to do." Still an opportunity That doesn't mean Australia can't join the movement towards DRI. "Australia has a challenge with the ores, but has a huge advantage in terms of energy costs. So that's a very interesting situation for us to be in," Berend said, noting that Australia like other locations that host DR plants like the Middle East has its own sources of natural gas and renewable energy. "And I would invest very heavily in processing because there's lots and lots of iron ore in Australia, people haven't looked at the magnetite deposits in the way they should. And I'm sure there's clean magnetite deposits out there that we could find." Magnetite ores with higher grades and lower impurities will save emissions in traditional blast furnaces as well, Berend noted. "There's a challenge here Australia because if we don't interact together we're going to miss the boat for the next generation of ores," he said. "People get distracted by this siren of let's try and do zero carbon steel. It makes no difference to the footprint for the planet of steelmaking. "We can do green steel in Western Australia, but it will still be a very marginal thing for the next century or 50 years. And whilst it's interesting and we should do it, the bigger picture is decarbonise the steel industry by having cleaner raw material baskets, cleaner coal, cleaner iron ore. Immediate impact." Cyclone and Vale recently completed phase 4 of the met testwork at Iron Bear, producing 2.3t of DR grade concentrate at 71% Fe and 1.2% silica with low deleterious elements, along with 3.5t of blast furnace concentrate and, critically, 260kg of direct reduction pellets grading 68.4% Fe and 1.5% silica. A scoping study is due by the end of June. Elsewhere across the ASX there are a host of other magnetite hopefuls. In WA Gina Rinehart's Hancock Prospecting is still working on studies into a deposit in the Pilbara known as Hardey and in the Yilgarn in a partnership with Hawthorn Resources (ASX:HAW) and Indian-backed Legacy Iron Ore (ASX:LCY). In South Australia Magnetite Mines (ASX:MGT) continues to hold the Razorback project near the long-running but clouded SIMEC Mining operation. In the Pilbara and Mid West are the long-established Sino Iron and Karara Mining operations, while in Tasmania, Grange Resources (ASX:GRR) operates the small Savage River mine, where an underground development to extend its life is in the works. Falling iron ore prices appear to have scuttle the Southdown development proposed by Grange in WA's Great Southern region, while in Hawsons Iron (ASX:HIO) continues to plug away in NSW. In Africa, AKORA Resources (ASX:AKO) is targeting the development of its 2Mtpa Bekisopa project in Madagascar, which unlike most magnetite projects can be upgraded to grades similar to the iron ore produced in WA's Pilbara with simple beneficiation. That means it can be developed as a low-cost DSO operation, costing just US$60.6m to establish and with capital payback in 1.8 years according to a recent PFS. FID is expected in mid-2026 with the first shipment due in Q3 2027 if all goes to plan. MD Paul Bibby said on the release of the March PFS that further drilling could confirm additional mine life beyond the initial 6 years, with the long-term vision of building a high-grade concentrate operation beyond the initial DSO project. According to assessments of the port capacity at Toliara, minimal upgrades would be needed to support Bekisopa's anticipated Stage 2 green steel iron concentrate product handling of a nominal 5Mtpa rate. What about coal? While iron ore prices have been relatively stable this year in the face of weak steel industry profits and macroeconomic uncertainty, coal has suffered dearly. Prices of US$187/t for the top-grade Queensland coking coal don't seem too bad until you factor in the much higher cost base for incumbent miners since the pandemic, and the fact most producers don't actually realise that benchmark price. Thermal coal is even more sold off, down at around US$103/t after a couple of mild northern winters. Experts don't think met coal prices, in particular can stay so far into the cost curve forever. Speaking to Stockhead last week, Precision Funds Management's Dermot Woods said it was just a matter of time before the market moved for its key pick in the space, Whitehaven Coal (ASX:WHC). " If you take how hard it is to get a project off the ground in any commodity and then multiply that by all the green tape around getting a coal asset up anymore," he said. " We're sort of bemused that people aren't willing to pay more of an option premium for something like Whitehaven, which is making OK money at the moment. "If you can compare and contrast to lithium, which also isn't working at the moment, but the price is going down and down and the coal price is level. " People are pricing in this coal price forever, whereas they're pricing severe mean reversion back to sort of US$12-1500 ... on lithium. " I don't think that the average person understands how much costs have gone up in the coal space or what the real all in sustaining costs are there. " I don't think there's a lot of people making much money in coal at the moment, so it's a matter of time to – and you never know when these prices happen – but until coal runs really hard."
