If ( and it's a big if ) we can produce steel via renewable energy in the Pilbara area then I think there are many benefits that will come out of it.
I'll leave out the future emission benefits that will become monetised eventually only because that's quite a way away and we don't know how big they'll be.
If the energy can be produced locally at a competitive rate and the resource is mined locally then the industry could be viable. No transporting ore by train and ship for thousands of kilometres back and forth. No transporting coal and gas to turn that ore into steel. Just the transport alone must add quite an amount to the price.
Firstly, a steel smelting industry provides a decent base load for system stability. In a similar way that aluminium smelters do that for the conventional grid now. It supports the existence of a large, industrial, heavy load grid.
Sure, you can store renewable energy for use later but if you can use it straight away there is quite an efficiency gain right there in production/manufacturing industries. Smelters can act as batteries so they actually become part of the grid infrastructure which is another positive synergy.
If we are producing large amounts of cheap clean energy then all those other energy intensive industries will follow and exploit that power advantage. That is where the advantage could multiply several times.
While steel making might be a lower end manufacturing process, it is a base that can support other, better opportunities that can't exist without it.
We will never be able to compete on a labor basis with China or the next emerging country but as these processes become more automated that cuts out that labor/red tape problem.
I think we need to look forward and keep in mind the need to have emission free ( or very low emission ) industries combined with the automation of most industrial processes. We need to be thinking like the entrepreneurs that are looking at producing hydrogen, exporting electricity to Asia and producing 200-300% of our energy from renewables in the future.
