Australia has core advantages that are forecast to make it a major global force in green iron export and, if it achieves this potential, it will have a greater impact on reducing global carbon emissions than Australia reaching net zero, according to fresh modelling by Mandala Partners.
A new report by Mandala Partners, commissioned by Boundless, has made a number of major findings, including:
- Australia could supply 20% of global green iron by 2050, producing 310 million tonnes annually. This would generate $103 billion annually for the economy and support 27,500 direct jobs.
- Green iron production could reduce global emissions by 1.7%, exceeding Australia’s current emissions (1.2% of global emissions). The steel industry accounts for 6–9% of global CO2 emissions.
- Australia enjoys key competitive advantages in green iron production including: low-cost solar and wind leading to potentially low cost green hydrogen, extensive iron ore reserves, the capacity to co-locate elements of the production chain for efficiency
- If Australia becomes a significant global green iron producer it would significantly reduce reliance on China (85% of current iron ore exports) by opening up markets in Southeast Asia, Africa, and other emerging markets.
- High capital requirements and technological risks are currently deterring private investment and significant government investment is required to kick-start the industry. Production would require 16 TWh of renewable energy by 2030 and 775 TWh by 2050, equivalent to 2.4 times Australia’s 2030 Renewable Energy Target, so $28.8 billion investment would be needed by 2030 to build production plants, hydrogen facilities, and renewable energy systems.
Amit Singh, Managing Partner, Mandala Partners said:
“$28.8 billion by 2030 is a lot to invest, no question. 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 28,000 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. But if we want to seize that potential inaction simply isn’t an option government has.”
Eytan Lenko, CEO, Boundless Earth said:
“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. 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.”