Magnetite Mines Ltd (ASX:MGT) has welcomed the findings of the Green Iron Supply Chain Study, announced by the South Australian Government this week, which highlights the state’s competitive edge in the production of green iron.
Domestic green iron industry
MGT CEO Tim Dobson said: “Creating greater global recognition of South Australia’s clear advantages as a future green iron producer is an important factor in accelerating the development of a domestic green iron industry.
“Green iron requires magnetite capable of producing premium-grade concentrates and hydrogen produced with renewable energy; South Australia has both.
“With abundant magnetite in the Braemar iron region, a world-leading gigawatt-scale renewable energy grid, a strong government commitment to green hydrogen production and proximity to existing industrial infrastructure, the state is ideally placed to take full advantage of the green iron opportunity that will enable Australia to become an economic superpower resulting from global decarbonisation.
“The foundation for South Australia’s green iron industry vision will be the new supply of premium-grade, very low-impurity iron ore concentrates such as will be produced at MGT’s Razorback Iron Ore Project in the Braemar.
“By pursuing this vision, South Australia has the opportunity to emerge as a significant producer of green iron, supporting the decarbonisation of not only Australia’s domestic steel industry, but much more significantly, the steelmaking industries of our key regional trading partners.”
Cost advantage, potential to lead
A collaboration between the Port of Rotterdam and Monash University, the study revealed that green iron produced in South Australia enjoys a 21% cost advantage compared to shipping its raw components to Europe.
The study emphasises South Australia’s potential to lead the global effort to decarbonise steel production, which is one of the most challenging sectors for carbon emission reduction.
The state’s superior magnetite resources, abundant renewable energy and significant investments in green hydrogen power contribute to this advantage.
Energy and Mining Minister Tom Koutsantonis outlined the findings at the World Hydrogen Summit in Rotterdam, where the state government delegation is engaging with prospective global partners to accelerate the green iron and steel industry in South Australia.
A formal Expressions of Interest (EOI) process for companies to partner in developing a green iron industry and supply chain in South Australia will open in June.
“In collaboration with selected industrial partners, Magnetite Mines has already committed to lodging an EOI with the South Australian Government for the development of hydrogen-based green ironmaking in South Australia by 2030, and we look forward to the government’s EOI process scheduled to commence in June this year,” said Dobson.
The government’s initiative aims to explore the development of a hydrogen-based direct reduction iron (DRI) plant in South Australia, with the goal of completion before the end of the decade.
DRI production can reduce carbon emissions by up to 85%, making it an attractive investment for jurisdictions with carbon adjustment mechanisms in place.