Screenshot 2023-12-18 at 4.14.09 pm.png14 bulkers moored in Port Hedland Photo : Max Brunet de Rochebrune (c)

Western Australia is facing off against a country in the Middle East to convince investors to build a $27 billion green iron processing plant, in northern WA. South Korean steelmaker POSCO is considering a proposal to build a hot briquetted iron (HBI) plant at the Boodarie Strategic Industrial Area in Port Hedland.

The proposed facility would use liquefied natural gas to reduce magnetite iron ore to pellets then into HBI, before being shipped to South Korea for use in steelmaking.Longer term, the company would look to replace gas with green hydrogen to reduce carbon emissions. Under current plans, the Port Hedland Green Steel (PHGS) project would be made up of six stages, each producing 2 million tonnes of hot briquetted iron and employing up to 2,500 construction workers with 400 ongoing operational jobs.POSCO delegates toured the port of Port Hedland with Pilbara Ports CEO Samuel McSkimming.

While there is significant buzz around the potential deal, Port Hedland is not the only location being looked at.Multiple industry sources have told the ABC it is a two-horse race, with a potential site being considered in Oman.If the project reaches full capacity, POSCO consultant Phil Scott said it would triple Australia's current iron making each year. "Australia's iron making production ... is currently around 4 million tonnes per annum," Mr Scott said."This is 12 million tonnes per annum if we had all six stages, so it really is a very significant project."

Fivefold value-add in processing
Western Australia produced 861 million tonnes of iron ore in 2022/23, worth $125 billion.
If that same iron ore was to leave Australian shores in the form of hot briquetted iron, Phil Scott believed its value would increase fivefold. "Australia and Western Australia has been looking for downstream processing and there's no question, there's a significant value add," Mr Scott said. The iron ore price has this week traded above US$137 per tonne.

Local businesses cautiously excited
Long-term business owners in Port Hedland are familiar with the boom and bust nature of the Pilbara. But it is hoped a shift towards downstream processing and renewable energy industries will provide consistency in the local economy.Port Hedland Chamber of Commerce and Industry (PHCCI) board member Claire Boyce said it was an "exciting time to be in Hedland". "There's over $170 billion expenditure planned for the Pilbara, and of that $70 billion is going to be in green industrial projects, so that's exciting," Ms Boyce said.
However Ms Boyce said critical shortages of both workers and housing continued to impact development."Obviously there's a lot of challenges," she said. "I think we've got an unemployment rate of 1.7 per cent ... so the access to further employees will be tricky. "We're going to have to get the housing component right, and I think that's something these resources companies will have to consider." Ms Boyce said the PHCCI was working on a program to help local businesses build capacity and best interact with the companies behind multi-billion dollar projects planned for the region.

Could boost business case for more renewable projects
Despite not yet confirming Port Hedland as the site for the project, the company has already started work to secure an energy supply. In October, POSCO announced it had agreed to work with global energy company Engie on a "significant" green hydrogen project in the Pilbara to supply its green iron plant.

University of Western Australia sustainability expert Professor Bill Grace said having a facility with a demand for renewable hydrogen could help get other renewable projects off the ground.That could include BP's Australian Renewable Energy Hub (AREH), 300 kilometres north-east of Port Hedland, which has plans to produce 1.6 million tonnes of hydrogen each year. "The combination of [renewable] energy and iron ore creates really quite a unique opportunity," Professor Grace said."I'm reasonably optimistic this [green steel plant] would happen ... and that would be a major boon for the energy hub, and hopefully kick it off. "In June POSCO won a US$6.7 billion deal to develop a green hydrogen project in Oman. Mr Scott said renewable projects to produce green steel could be done in the Middle East "just as easily ... and probably with less cost associated with it"."We're very focused on trying to make sure that we can attract stage one [of the project] and retain it for the benefit of Australia, Western Australia and Port Hedland."

The feasibility study and final investment decision are due in 2024.

Source : ABC - Michelle Stanley