Australia-based steel producer BlueScope Steel has approved the A$1.15bn ($740mn) reline of a blast furnace at its 2.1mn t/yr Port Kembla steelworks as it waits for green steel technology to evolve.
BlueScope's chief executive Mark Vassella thanked Canberra for reforms to the safeguard mechanism that allowed it to invest in the reline, which could enable it to continue making steel using coking coal for up to another twenty years. The reline of blast furnace No. 6 will replace No. 5 when it reaches the end of its lifespan in 2026. The cost of the reline has increased to A$1.15bn from A$1bn, partly because of economy-wide inflation.
The reline will enable BlueScope to maintain steel production at Port Kembla until lower-carbon steelmaking options mature and does not necessarily require the firm to commit to 20 years of traditional steelmaking, Vassella said. The development of green steel production is reliant on commercially viable technology, as well as the availability of hydrogen and/or renewable energy to power it but it could become an option at Port Kembla from the late 2030s, he added.
Vassella welcomed Canberra's investigation of a carbon border adjustment mechanism, but warned that it will be complex for the heavily trade reliant Australian economy. He also welcomed the federal government's consultation with hard-to-abate industries, such as steelmaking, as it seeks to meet its carbon emissions reduction goals.
BlueScope has agreed to invest NZ$300mn ($178mn) to replace its oxygen steel converter with an electric arc furnace in New Zealand. This will reduce scope 1 and 2 emissions at its subsidiary NZ Steel by more than 45pc from 2026. This was made possible by a NZ$140mn investment by the New Zealand government, alongside a reliable supply of scrap metal and renewable electricity.
BlueScope is working with UK-Australian iron ore producer Rio Tinto to explore the utilisation of green hydrogen for the direct reduction of iron ore, sourced from Western Australia. It is also evaluating various decarbonisation project options and the necessary enablers, such as renewable energy and hydrogen supplies. Bluescope has set a net zero by 2050 goal.
BlueScope, which operates steel making and distribution facilities in Australia, the US, New Zealand and Asia, reported earnings of A$1.01bn in January-June, down by 59pc from the previous year. This was largely because of lower spreads between steel, iron ore and coking coal, lower volumes and higher costs.
