As Chinese steel mills go green, Pilbara at risk of becoming a “wasteland” says Andrew Forrest of Fortescue Metals Group

The technology is not yet widely used across the steel industry as it remains far more expensive than basic coal-intensive furnaces.

But Sims, who now chairs the Superpower Institute, a think tank founded by energy expert and economist Ross Garnaut, said Australia had the iron ore and world-class wind and solar resources to make it work.

Instead of being left behind as a “wasteland”, the Pilbara could “absolutely blossom”, Sims added. “The potential is enormous,” he said.

In a new report, the Superpower Institute calculates that Australia could generate up to $386 billion a year by 2060 if green iron replaces iron ore as its largest export.

It identifies South Australia’s Eyre Peninsula, Gladstone in Queensland, Kwinana, Geraldton, and the Pilbara in WA as ideal locations because they could be easily coupled with the vast solar and wind generation required, and had existing infrastructure that could be expanded.

However, the federal government must act urgently to “level the playing field”, Sims said. The report recommends providing tax credits to simulate the effects of a carbon price, grants covering up to 30 per cent of investment costs for early green iron projects and a boost to essential shared infrastructure such as electricity transmission, hydrogen pipelines, ports and water supplies.

The global steel-making industry is a significant contributor to global warming, accounting for at least 8 per cent of the world’s emissions.

Fortescue is investing heavily in a push to diversify into green hydrogen, and has plans to build a commercial-scale green iron plant in the Pilbara. The nation’s two biggest miners, BHP and Rio Tinto, meanwhile, have partnered with BlueScope Steel to build an electric iron-making furnace as part of a demonstration project at Kwinana near Perth.

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