Australian miner BHP Group has warned that developing a green iron industry domestically would be significantly more expensive, despite a recent Australia-China agreement aimed at decarbonizing the steel supply chain, which is responsible for nearly 10 percent of global carbon emissions, according to a report by Reuters.
Industry perspective from BHP
Speaking during meetings between Australian and Chinese industry leaders, Geraldine Slattery, president of BHP’s Australian operations, stated that, even with generous policy support, the cost of green iron production in Australia would be double that of the Middle East and China, and customers are many thousands of kilometers away. Ms. Slattery emphasized that the commercial viability of green iron production in Australia remains unfeasible under current conditions.
Australia’s role in the steel supply chain
Australia provides around 60 percent of China’s iron ore requirements, but the ore is typically too low-grade to be directly converted into steel using renewable energy. It requires an extra processing step, which, if powered by renewable hydrogen or biomass instead of coal, produces green iron, a low-carbon input for green steel production. However, these technologies are unlikely to become commercially widespread before the 2030s.
