GFG to invest up to $500m at Whyalla with arc furnace to cut emissions 90 per cent
Sanjeev Gupta’s Liberty Steel will dump coal-based steelmaking at Whyalla, announcing plans to invest $500m for electrical and hydrogen-powered alternatives.
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GFG Alliance’s Liberty Steel will invest up to $500m in a new electric arc furnace and a hydrogen-fuelled direct reduction plant at Whyalla, locking in a green-steel future for the industrial city.
Liberty executive chairman Sanjeev Gupta announced on Tuesday that coal-based steelmaking at Whyalla would be phased out by 2025, with the signing of a supply contract for a 160-tonne, low carbon-emissions electric arc furnace to be installed at Whyalla.
Liberty said the new infrastructure would increase steelmaking capacity at Whyalla from 1 million tonnes per annum to more than 1.5mtpa, while reducing carbon dioxide emissions by 90 per cent.
The company said it had also engaged suppliers for the installation of a 1.8mtpa direct reduction plant (DRP) for Whyalla, which will be able to process local magnetite ore to produce low-carbon, direct reduction iron (DRI).
“The DRP will initially use a mix of natural gas and green hydrogen as the reducing agent, before fully transitioning to green hydrogen as it becomes available at scale,’’ Liberty said.
“The low-carbon DRI can then be fed into the electric arc furnace in combination with scrap to produce high-quality steel grades for Australian infrastructure projects, and to serve the growing global demand for low-carbon DRI.’’
Liberty did not release an exact cost figure for the new infrastructure but is understood the investment will be in the range of $400m-$500m.
There will be an unspecified number of new jobs during the construction phase, and Liberty said the full transformation to carbon-neutral steelmaking by 2030 “is expected to grow the total permanent workforce numbers over the next seven years’’.
“The installation of the electric arc furnace and associated infrastructure is an investment project that will be funded by the business with an application to be made to the Whyalla Steel Taskforce for a $50m grant that was committed and funded by the South Australian government in 2016 to be used towards this investment, pending approvals,’’ Liberty said.
“Engineering work is already advanced and construction is expected to be completed in 2025 replacing the existing coke ovens and blast furnace.’’
Mr Gupta said the announcement was a significant milestone for Liberty and Whyalla.
“Today marks the beginning of a new era placing Whyalla at the heart of a global revolution in the steel industry, moving it from being the most polluting of all industries to among the cleanest and greenest,’’ Mr Gupta said.
“Through the steps we’re taking to install state of the art low carbon iron and steelmaking technologies here in Whyalla we will not only support Australia’s climate ambitions, but we will help to decarbonise steel supply chains globally.
“Whyalla has some of the best conditions to make low carbon iron and steel anywhere in the world and with our magnetite expansion plans, coupled with South Australia’s endless resource for renewable energy and green hydrogen, the potential for Whyalla has no bounds.”
Premier Peter Malinauskas said the government was excited to see progress on the plan to decarbonise Whyalla, where the state government’s own $593m hydrogen precinct will be based.
“Whyalla and the broader Upper Spencer Gulf has enormous potential to lead the world in green hydrogen production, helping decarbonise industry across the planet,’’ Mr Malinauskas said.
“That’s why my government has selected Whyalla to be the home of our Hydrogen Jobs Plan, which will see the world’s biggest electrolyser and hydrogen power station.
“We look forward to working with key industrial players, including Liberty, to take full advantage of the opportunity to reindustrialise the Upper Spencer Gulf on the back of this.”
Global equipment manufacturer Danieli will be supplying the arc furnace.
“The supply contract enables Danieli to commission the construction of the cutting-edge electric arc furnace, which will initially be fed by domestic steel scrap and other iron-bearing materials to deliver an expected 90 per cent reduction in direct CO2 emissions compared with traditional blast furnace production,’’ Liberty said.
“Danieli’s patented Q-One technology, the first of its kind, provides capability for a direct feed from renewable power sources which could help to eliminate indirect emissions from Whyalla’s new steelmaking facility.’’
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Originally published as GFG to invest up to $500m at Whyalla with arc furnace to cut emissions 90 per cent
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