Understanding the demand for Green Steel, page-147

@MGT4eva

Iron Ore, Steel and Magnetite
The emerging demand for ‘green’ steel increases the already significant opportunity for South Australia to expand its economy both by opening new iron ore mines and by establishing further downstream processing plant for value adding. Indeed, the state is judged to have strong potential to become a substantial exporter of high-grade, green ferrous feed/products.

However, consultations with industry indicate that unlocking this opportunity is likely to require the establishment of new public-private partnerships to provide the sector with to access a stable supply of renewable electricity and net-zero hydrogen at a competitive price, together with the major infrastructure of roads, heavy rail, deep water port facilities and water supply.


The 'Inquiry into South Australia’s renewable energy competitiveness' final report (135 pages) was released by the South Australian Productivity Commission ('SPAC').

See links below:
https://www.sapc.sa.gov.au/inquirie...renewable-energy-competitiveness/final-report
https://www.sapc.sa.gov.au/__data/a...petitiveness-Final-Report-Website-Version.pdf

Chapter 4 'Green minerals - opportunities and challenges' could be of particular interest. [pages 100-104]

"There are potential downstream benefits for South Australia from increased demand for minerals needed for the global energy transition and from increased downstream processing of South Australian minerals, which would otherwise be exported as ores, to produce metals such as copper or iron.

There is also the possibility that structural changes in global supply chains may lead to onshore mineral refining activities for South Australian ores. If this does happen it is likely to be either because of investor pressure on mining companies to minimise the scope 3 emissions from refining the mineral ores they produce, or because a combination of increasing international shipping costs and local cost advantages in decarbonisation outweigh the economies of scale that see most Australian minerals refined offshore."

Unfortunately for South Australia, seeking to facilitate 'green' minerals opportunities is deemed a longer-term potential priority for the following reason.

Longer-term priorities
The potential opportunities for the State around green minerals will be dependent on both low cost and abundant renewable energy, and the availability of competitively priced green hydrogen.

This means that seeking to facilitate green minerals opportunities is a longer-term potential priority as it will only be feasible if both barriers to renewables are addressed, and a local green hydrogen sector emerges. The longer (and medium) term objectives will only be captured as uncertainties in export markets are resolved. [page 105]

Section 5.4 Maximising the potential opportunity from green minerals [page 110]
Policies to facilitate the development of a green minerals sector in South Australia have a very significant overlap with those required to facilitate the development of a green hydrogen sector. Low-cost and abundant renewable energy, and low-cost green hydrogen are likely to both be pre-conditions for the emergence of a green minerals sector, but if the State removes the impediments to renewable energy (as recommended in section 5.1) and is successful in facilitating the emergence of a green hydrogen sector then that would set the preconditions for taking advantage of potential green minerals opportunities.

Other areas identified by industry in the consultations appear to be outside the scope of prudent government intervention.

Note: South Australia’s poor budgetary position, and the poor historical (and current) economic growth performance constrains the extent to which the State Government can support the development of a local green hydrogen sector [and 'green' minerals, including magnetite]. Some other jurisdictions are offering substantial financial support to developers. [page 15, Finding 31]

Cheers

These are only my thoughts and it does not constitute investment advice. Before acting on any information you read and before making any financial or investment decisions, you should always consult your advisor(s) or other relevant professional experts.