ANDREW SHOULD AUSTRALIA BE A SUPER STEEL PRODUCER?, page-59

Hi Samuai.
You seem to specialise in insults not backed up by facts.
Australia "used to" make steel you say. We still do.
The Whyalla steelworks makes about 1.5mt per year of hot rolled products and Port Kembla about triple that of plate.
Australian steel is "crap" you say. This could not be further from the truth. Australian steel is extremely high quality but it is more expensive and the trouble with Australian steel is that purchasers have preferred a lower quality but cheaper product. Australia will never build another integrated steelworks. The factors working against us are labour and safety regulations, environmental regulations and scale.
Integrated steelworks are dangerous places. We do not accept loss of life on industrial sites in Australia and this safety makes the plants expensive.
Scale is also a problem for Australia. In Whyalla the rolling mill has to change over for every different product and we are a small market as a country so we do small product runs which pushes up cost. Environmental regulations are also a problem. I am not sure if you have ever been in a coke ovens? I don't think our laws would make it even possible to build a coke ovens in Australia these days.
So I don't think building a steelworks in Australia at all is possible let alone the Pilbara which would have huge labour costs and cyclones to deal with.
However making a premium iron or raw steel product on site goes in the opposite direction. It potentially reduces costs by reducing volumes for the same amount of Fe. It potentially improves scale by exporting more Fe in the same size wagon and ship. And it potentially improves revenue both from the extra Fe but also from the increase in sale price because it is a premium product. And doing this using renewable energy opens markets up even more.
The concept has been around for a long time. Remember the BHP HBI plant? That was the same underlying concept. The issue will be in the technology and the execution. If FMG can get it right then this will be a game changer.