Yeah your right @Jenkstar and normally what you say would kill any chance of it happening. However if I may point out there is now a seismic shift away from companies that are operating in geographic locations that have neither fossil fuels plentiful quality ore nor green energy. This includes Japan, korea, most of Europe and China. The pendulum has now swung to the likes of Australia and the USA that do. And it has swung hard, like an axe, many mills are now dead meat, and already closing fast in China, fossil fuel supply and pricing will stay exhorbitantly high till they collapse. Xi has just bailed out the property developers in a last gasp attempt to appease angry citizens meaning they are now paying twice for developments that weren't needed in the first place but will at least give mills a temporary reprieve for a sector that is half of the steel market.
Importing all of your inputs then exporting steel is no longer an option because a large part of the end product is embedded energy, now easily appraoching 40-50% of total costs, accentuated by the iron ore price drop. Take a steel mill in what is now the wrong location that relies on imported ore, coal and fossil fuel generated electricity. The embedded energy contained within the end product is huge. Take another mill in the right geographic location with cheap green electricity using either hydrogen or electrolysis such as the Iron triangle where HIO forthcoming port will be located in Australia..... the energy costs will be massively lower despite labour costs.... wind and solar can be had for 6 cents per kWh or less especially if its located on their own property, thus avoiding transmission fees.
I'm not suggesting that HIO or even Aussie co's are going to process the ore into higher value products, just that it makes increasing sense for foreign steel makers to do so here using the best quality ore available. Fossil fuel based power costs are now prohibitive worldwide and that is unlikely to change this decade. Steelmakers in the USA will/are use a combination of cheap fracked gas, solar and wind and tariffs to onshore their domestic steel industry and Australia should soon do the same except without the gas that is earmarked for overseas yet still able to export finished/semi-finished steel products to exploit the newly emerging opportunity. Saudi Arabia is not inclined to turn on its spigots and ruin the windfall profits its now enjoying despite its mortal price enemy....fracking in the USA.... ramping back up with a vengence. The USA has not been nor will it be its energy market for a decade now, which also means the Yanks now have little appetite or incentive to protect it or it's shipping lanes, middle East chaos is surely just around the corner.
Then Russia is also turning its spigots off for Europe before the sanctions fully do it for them.... damaging a fair percentage of oil and gas infrastructure in the process....permanently. Putin is calculating Russia can make just as much from the higher prices it has created from the remainder whilst crippling his mortal enemies in NATO countries. The shortage of gas is causing high prices that flow onto coal and oil..... there is no stopping these dynamics. The only thing that can change this pardigm energy shift is if Putin is gone in the next few weeks yet his survival now demands fighting perpetual enemies to manufacture survivable approval ratings. Otherwise the trillion rubles he and his mates have stolen from its citizens and the equivelent new damage he has just done to the economy in his futile quest to become "Putin the Great" will consume him.
I'm tellin ye all that the steel world has changed my friends, and HIO is perfectly positioned to benefit from it.
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