Longreach to Pilbara Railway

Originally posted by taximoney: ↑

This may sound like a good idea BUT who will buy our steel. Our buyers of coal and iron ore already have their own steel furnaces. Also you will often find the steel processing factories adjacent to the large furnaces. The reason is that so much energy has been spent in producing the molten steel to a specified standard (with alloying elements that have been added).

With the existing situation:
a) The furnace companies in the client country can conveniently transport the coking coal and the iron ore (on conveyors) from the ships to where they are needed.
b) The manufacturing company that buys the steel from the furnace often wants to buy the steel HOT to save the cost of reheating it again for further processing. That is why you will find clusters of manufacturing companies around a major steel mill.
c) Large containers on tracks are used to transport the hot molten steel.
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So now consider the logistics if we tried to export steel from Australia?
a) Coal would be railed from eastern Australia to Western Australia at a much greater cost than shipping it by sea to the client countries
b) Infrastructure for steel mills would need to be built in the Pilbara. Labour costs would be horrendous
c) The steel would have to be cooled to briquettes/flat sheet and transported COLD in a ship.
d) It would almost certainly not be produced to the standard required by the buyers
d) So the buyers would have the extra costs of taking the briquettes from the ship and transporting it to the a re-heating facility where the steel would be melted and analysed. Specified alloying elements would be added.
e) The molten steel would be on-sold to the manufacturers.

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This a typical "cant bat, cant bowl" position.
(a)Coal is already being railed from Emerald to the coast as is Iron Ore from the Pilbara to the coast.
By adding value in Australia there is an overall benefit in our Government supplying the infrastructure.
The mega smelters & steel processing plants you refer to are mostly Chinese Government owned & operated.
If that is OK with the current WTO trade regime for China, then why not for Aus?

(b) If what you say is true, then why do we not convert our molten alumina into aluminium castings; particuluarly
for global auto manufacturers?

We have the timber on all other countries because we can produce high rade iron ore & premium met coal
much cheaper than china or other steel makers. It is simply a matter of adding Aussie value.

Saudi Arabia nationalised its oil/petroleum in 1973 and look at them now!
It is just in the process of floating a fraction of its national oil processor for a world record IPO price
and Saudi individuals have enjoyed one of the highest living standards in the world.

Perhaps the Populists will latch on to this opportunity and "Make Australia Great" ?