Whyalla can be upgraded to green steel and why we need to keep steel production in Australia
Daniel Rossetto, Adjunct, Institute for Sustainability, Energy and Resources, University of Adelaide Financial challenges at the Whyalla steelworks in South Australia have reignited debate about the nation’s steel industry and its future. Australians should have access to quality steel at competitive prices. The domestic steel production industry employs tens of thousands of people. The state and federal governments have stepped in, however, announcing a A$1.9 billion support package for Whyalla, together with a new $1 billion green iron investment fund. Half of the new fund will be allocated to Whyalla to support its transition to green steel production. That’s a large amount of money for a privately owned business. So, are the new packages going to be money well spent? To answer that question, let’s examine the priorities. A national priority Steel is an industry in which securing sovereign production capability is crucial. Sovereign capability means ensuring an industry can survive external shocks such as interruptions to shipping routes or disputes with other countries in the supply chain. Steel is a vital input for defence industries such as ship and submarine building. What could be said of a country’s autonomy – or its sovereign capability – if it relies on others for the steel needed for its defence? Whyalla is one of the two largest steelworks in Australia, the other being BlueScope’s Port Kembla plant. At least at first glance, the green iron investment fund seems to deal with the sovereign capability criterion well enough. Whyalla appears an ideal candidate. Prime Minister Anthony Albanese, Minister for Industry and Science Ed Husic, and SA Premier Peter Malinauskas visit Whyalla Steelworks in Whyalla last week. Isabella Ward/AAP However, the public subsidy is large. The subsidised plant’s ability to operate in an economically competitive manner needs to be examined. Further, while the Whyalla plant began its life as a supplier to an adjacent shipbuilding operation, […]