We are using a small amount via Bluescope steel but that is just a drop in the ocean in comparison to our almost a billion tons/year exports of which nearly 80%goes to China. I takes nearly 2 ton of iron ore and about 3 quarters of a ton of met coal to make 1 ton of steel . Some electricity is also required and scrap can also be added.
IMO, to overcome labour cost inputs and excessive red, we have to isolate steel manufacturing in SEZs and designate all SEZ products for the export market at at mega scale to achieve an economy of scale , because producing for the domestic market within SEZs would be unfair to Bluescope or any other domestic manufacturer and end up being a political football by politicians whose sole objective is to get into power & stay there.
Labor driven by the ACTU is unlikely to support SEZs because all Labor wants to hear is Jobs, Jobs & Jobs.
The ideal of a world competitive mega steel smelter/mill is that: -automated as much as possible (minimum labour) -where labour is needed that it is supplied at the lowest possible global rate via guest labourers (Like Saudi Arabia's petro-Chemical industry) -that the sole object is to add Australian value to our raw iron ore, met coals & LNG, diversify trade away from China, add to our trade surplus & our GDP and share the benefits equitable among all Australians via inalienable Aussie ownership.
Once established, aluminium could be produced under the same model when our current aluminium smelters (foreign owned) cark it.
At present we have lost the opportunity to do that with our mines & mining because 86% is foreign owned the US passed laws recently that entitles US entities to sue the Commonwealth of Australia if our Government takes any action to take control of our natural resources which have been sold by the Respective States on a Lease system for the mine life; in effect the multinationals own the resource with a massive hole in the ground left once the lease terminates.This however is a Call option by the multinationals and if say the ass falls out of the price of the mined product, the state does not have the right to Put the contract on the Multinational.
from Memory, Australia's exports of Iron Ore & Coals combined is about 1.6 billion tons for about $230 Billion AUD of which the States earn about $13 billion in Royalties.( perhaps someone has the actual figures) he average royalty is about 7% but States have given concessions in lieu of investment (dont mention political donations)
IMO we can readily double our resource export revenue by downstream processing but we need Aussie patriotic leadership rather that our Machiavellian mob who game the system.
Singapore,although a city State with no natural resources, has managed to develop its economy via meritorious leadership rather than by rabble political cronyism.They even have a marketing hub for our resources so that they can skim off some profit as evidenced by the recent ATO cases against BHP & RIO.
