The Institute for Energy Economics and Financial Analysis (IEEFA) has warned that Australia’s iron ore market is set to face increased competition from the emerging green alternatives. According to a new report from the think tank, the quality of the ore from Australia’s major producing region – the Pilbara – largely falls below direct reduction-grade, which means it is “currently ill-suited” to low-carbon steel production. Despite the advantages of solid infrastructure and a “stable investment environment”, IEEFA said Australia is vulnerable to increasing competition from markets such as Brazil, the Middle East and Africa, which are in a “prominent position” to produce green hydrogen-reduced iron. The report said that the global steel sector is increasingly keen to receive green iron rather than shipping both green hydrogen and iron ore. It also flagged that the Australia has an opportunity to shift towards using green hydrogen in the onshore processing of iron ore to produce low-carbon iron for export. Although Australia is seeing “growing focus” in the development of green hydrogen, the inefficiency and cost of exports are “significant obstacles” which require a “rethink” according to IEEFA. Technology developments that allow the use of Pilbara iron ores in low-carbon iron making using direct reduced iron processes “need to be accelerated” to prevent Australian iron ore losing market share to other countries and regions, it added.
🌏The global #steel sector is at a crossroads, and the latest report from @SimonJNicholas and @BasiratSoroush sheds light on the challenges and opportunities Australia is encountering in the emerging green #iron market.
👇https://t.co/vTUJsrnXyz pic.twitter.com/RfqglP0FHj— IEEFA Asia Pacific (@IEEFA_AsiaPac) September 1, 2023
