As electrification advances at pace, attention has turned to industrial carbon emissions, especially those created within manufacturing sectors.
With strong advantages of abundant renewable energy availability, high-grade iron deposits and extensive, multi-decade expertise, Australia has an opportunity to supply as much as 20% of the world’s green iron demand by 2050.
According to a new report by Mandela Partners, commissioned by climate solution firm Boundless Earth, the green iron industry could generate $103 billion for the local economy each year while directly supporting 27,500 jobs.
“This report clearly shows the importance and strategic opportunity of transforming our iron ore industry to a green iron industry — and its critical role in Australia becoming a renewable superpower,” Boundless Earth CEO Eytan Lenko said.
“If Australia reaches its green iron potential, it would be a huge contribution to global climate action — equivalent to exceeding national net zero in Australia.”
Reducing global emissions with Aussie iron
Australia has long been an iron ore powerhouse, taking the crown as the world’s largest producer of iron ore (more than doubling the output of our closest rival) with the largest reserves, estimated at 58 billion tonnes in 2023.
If the report’s predictions are accurate, building a green iron industry in Australia would not only be an economic boon but an environmental one as well.
Mandala forecasts a potential 1.7% reduction in global emissions by 2050 if Australia’s green iron industry can ramp up to 310 million tonnes a year (less than a third of our current production rates), which would functionally wipe out Australia’s carbon emission balance, currently sitting at about 1.2% of global emissions.
Our economy isn’t quite ready for that yet, however – we’ll need 16 terawatt hours (TWh) of renewable energy by 2030 and 775 TWh by 2050 to service the green iron industry.
A $28.8 billion investment would be required by 2030 to build out the green hydrogen facilities, renewable energy systems and production plants required.
“$28.8 billion by 2030 is a lot to invest, no question,” Mandala Partners managing director Amit Singh said.
“But we’re talking about a new industry in which Australia has unique natural advantages – an industry that would generate over $100 billion a year and 27,000 quality jobs.
“Surely that has to give any responsible Australian Government pause for thought.
“I think the most vital point that emerges from this modelling is that Australia has an undeniable opportunity to position itself as a global titan in a new industry, but that will not happen unless the government pushes hard now to dislodge the boulder from the top of the mountain.
“Relying on private investment alone is not going to get us there, especially given the renewable energy infrastructure requirements.
“It’s actually genuinely exciting to think about the potential Australia has in this moment.
“If we want to seize that potential inaction simply isn’t an option government has.”
Australian governments have not had the best track record of investing in long-term infrastructure projects in recent decades despite their wide-reaching benefits but perhaps a strong combination of economic, social and environmental advantages will be enough inventive to grease the wheels of bureaucracy.
Green iron ASX companies
ASX companies like Magnetite Mines Ltd (ASX:MGT) are already working to build a low-carbon iron industry within Australian shores, having just recently joined a South Australia Green Iron Consortium alongside Aurizon Holdings, Flinders Port Holdings and GHD.
Read: Magnetite Mines enters “transformational period” in global shift to ‘green steel’
Others like Cyclone Metals Ltd (ASX:CLE) are developing low-carbon iron operations in other parts of the world, leveraging Australia’s extensive expertise.
Read: Cyclone Metals closes up to A$200 million MoU with Vale SA to bring Iron Bear Project to decision to mine