The Whyalla steelworks has received a $63m federal grant to go green on steelmaking

The GFG Alliance-owned Whyalla steelworks has received a $63m federal government grant to help fund its shift from coal to electric-based steelmaking.

The Whyalla steelworks has received a $63.2m federal government grant to help fund its switch from coal-based steelmaking to using electricity, with that transition expected to cost hundreds of millions of dollars.

Liberty Steel Australia, part of Sanjeev Gupta’s GFG Alliance which owns the steelworks, will receive the grant under the federal government’s Powering the Regions Fund.

BlueScope Steel also received $136.8m under the grant program to go towards relining and upgrading one of its blast furnaces at Port Kembla in New South Wales.

Prime Minister Anthony Albanese visiting the Whyalla steelworks in September 2023.

The Whyalla funding will go towards the purchase and commissioning of an electric arc furnace which will replace the current coal-powered blast furnace at the steelworks.

Liberty has an ambition to transition to carbon-neutral steelmaking globally by 2030 and in April last year announced it would invest up to $500m in a new electric arc furnace and an-eventually hydrogen-fulled direct reduction plant at Whyalla.

The two pieces of infrastructure would allow Liberty to phase out coal-based steelmaking at Whyalla by 2025, Mr Gupta said at the time.

On Wednesday he said now was the time to “phase out increasingly obsolete equipment and technology that no longer has a place in our world’’.

“In addition to the installation of the electric arc furnace, our magnetite expansion project will unlock over four billion tonnes of high-quality magnetite that will be used at Whyalla to support the production of green iron and steel and exported to our businesses and customers around the world,’’ Mr Gupta said.

“Whyalla will be the global epicentre for manufacturing low carbon iron and steel.

“It has all the elements required to dominate the green steel industry - vast reserves of magnetite of the highest quality, abundant generation of renewable energy, deep seaport, a robust workforce, supportive governments and invested owners.’’

The state government is also developing a $593m green hydrogen precinct adjacent to Whyalla, which will include what will be the world’s largest hydrogen electrolyser once complete.

Federal Minister for Climate Change and Energy Chris Bowen said the grants were about securing the long-term future of the Australian steel industry.

“We want to make sure products vital to our economic future like green steel are made in Australia, but this will require innovation and new ways of processing iron ore that decarbonise our steel industry.

“Total steel demand for the energy transformation from 2022 to 2050 will be almost 5 billion tonnes, accounting for 75 per cent of the total material requirement – and that steel will increasingly be green steel.”