Australia must act now if it is to seize the opportunity to play a significant role in decarbonising domestic and global steel production and utilise the nation’s significant international comparative advantage to create a competitive green iron industry, according to Magnetite Mines Ltd (ASX:MGT).
This statement is part of the company’s submission to the Australian Government’s Green Metals Consultation Paper.
The submission outlines the stark challenge facing the steel industry currently responsible for producing 8% of the world’s carbon emissions.
Strong new market demand
MGT said the task of decarbonising the steel industry’s operations is creating strong new market demand for high-grade iron ore as the industry scrambles to secure a new supply chain for DR-grade iron ore capable of being used for green steelmaking in new Direct Reduced Iron (DRI) facilities and Electric Arc Furnaces (EAFs).
The requirement for high-grade ore by 2050 is estimated to be more than five times the current demand.
To respond to this demand, the submission recommends that Australia rapidly develop and then implement a National Green Iron Strategy that puts in place the policies necessary to take advantage of the nation’s abundance of high-quality magnetite iron ore and renewable energy resources to support the production of Green Iron from hydrogen at scale.
“Ideally positioned”
Magnetite Mines chief executive officer Tim Dobson said: “The global steel industry has a carbon problem that is creating the demand for green iron that Australia’s abundance of magnetite and renewable energy is ideally positioned to help solve.
"However, we are not the only nation eyeing this opportunity and Australia must act now to seize the opportunity to produce green iron if it is to secure the massive economic, environmental and regional community benefits possible by being a first-mover in this industry.”
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Australian Green Iron Vision
MGT’s submission articulates an Australian Green Iron Vision that sets a goal for the nation to produce 10 million tonnes per annum of export-quality Green Iron by 2035 and building on this foundation to grow significantly in scale beyond that time.
A series of policy options have been identified in the submission to achieve the Australian Green Iron Vision by 2035, central to which is the identification and financial support from Federal and state governments for key common user infrastructure including transport (port and rail), renewable power and water supply.
Magnetite Mines has also identified the absence of domestic facilities to test and demonstrate the production of Australian green iron as a significant barrier to establishing a green iron Industry that must be quickly addressed.
The company has recommended that government move to quickly fund and build a Green Iron Centre of Excellence, designed to test and prove Australia’s capability to produce export-quality green iron from locally sourced magnetite concentrates.
About Magnetite Mines
Magnetite Mines is focused on the development of magnetite iron ore resources in the highly-prospective Braemar iron region of South Australia.
The company has a 100%-owned mineral resource of 6 billion tonnes of iron ore and is developing the Razorback Iron Ore Project, 240 kilometres from Adelaide, to meet accelerating market demand for premium iron ore products being created by iron & steel sector decarbonisation, with the potential to produce high-value Direct Reduction (DR) grade concentrates.
Razorback is set to become a very long-life iron ore project with expansion optionality in a tier-1 jurisdiction that will produce a superior iron ore product sought by steelmakers globally.
Partnering a priority
Recognising the funding needs of the project, the company has prioritised strategic partnering as a both a source of near-term funding to materially advance the Razorback Iron Ore Project and establishing future partnerships for the development of the project.
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This sustained effort follows many months of detailed due diligence, site visits and negotiation with prospective partners.
The company has pursued high-quality partnerships with a focus on North Asian steelmakers seeking to secure high-grade magnetite concentrates in support of their transition to decarbonised iron and steelmaking.
Due diligence and negotiations with several potential partners are ongoing with the company aiming to secure near-term funding and long-term partnerships for the development of the project.
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