New Consortium Looking to Kick Start South Australia's Green Iron Industry

A consortium has been formed to accelerate the establishment of a green iron industry in South Australia, iron ore-focused Magnetite Mines (ASX:MGT) announced on Tuesday (October 22).

Called Green Iron, the group is comprised of Magnetite Mines, freight rail transport company Aurizon Holdings (ASX:AZJ,OTC Pink:QRNNF), South Australian port operator Flinders Port Holdings and global engineering company GHD.

“Green Iron SA is proposing a phased development pathway, enabling the necessary foundations to be put in place to ensure the creation of a green iron industry in the state is sustainable,” the announcement reads.

Magnetite states on its website that South Australia has been identified as an ideal location for the production and development of green iron given its abundant land, solar and wind resources. The Australian state also hosts existing mining and logistics infrastructure, stable regulatory frameworks and vast reserves of magnetite.

Each of the founding companies will make contributions to advance South Australia's green iron industry.

The consortium will begin by fast tracking Magnetite’s flagship 4.5 billion tonne Razorback iron ore project, which it says will produce secure supply of high-purity magnetite, a critical element for the production of green iron.

This will be followed by the production of direct-reduction-grade pellets, which will be manufactured and exported as direct reduced iron in the form of hot briquetted iron from Port Pirie by the early 2030s.

“Aurizon is supporting the development of a project critical to addressing the challenge facing the steel sector’s carbon emissions by providing the rail and freight infrastructure that will make South Australia’s green iron industry globally competitive,” commented David Steele, head of customers and growth at Aurizon.

Meanwhile, Flinders Port Holdings said it is “ready to facilitate the export of green iron products to global markets,” noting that its Port Pirie precinct can develop a state-of-the-art export hub.

For its part, GHD said it will provide its engineering and sustainability expertise to the consortium.

“The use of green hydrogen and renewable energy for steel production has enormous potential in terms of reducing carbon emissions, and we’re excited by the prospect of establishing new standards for the global iron and steel industry,” said Mike Nolan, executive leader for resources and energy at GHD.

Discussions with the South Australian government and Australia's federal government on the necessary partnerships and infrastructure for the consortium have started.

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Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.