Gupta to stop use of coal in steelmaking at Whyalla, use wind and solar instead

UK billionaire and steel magnate Sanjeev Gupta says the promised “greening” of the ageing Whyalla steelworks he bought out of bankruptcy in 2017 is about to take shape, with the phasing out of coal and its replacement by renewable powered technology.

Gupta’s Liberty Steel, part of his GFG Alliance group, says it anticipates a 90 per cent reduction in direct CO2 emissions from decision to install a 160 tonne “first of its type” electric arc furnace that it says will guarantee the future of the Whyalla facility.

The plans – reportedly costing nearly half a billion dollars – include a 1.8 million tonne direct reduction plant (DRP) that will be initially supplied by fossil gas before transition to green hydrogen, delivered by the state’s ample wind and solar resources.

The new furnace – which will be fed by domestic steel scrap and feed from the DRP – will lift the capacity at Whyalla from one million tonnes a year to more than 1.5 million tonnes, and cut direct emissions by around 90 per cent when compared to traditional coal-based blast furnaces.

The furnace will take a direct feed from renewable power sources which could help to eliminate indirect emissions from Whyalla’s new steelmaking facility. Coal has been used at the facility for more than half a century.

Gupta hopes to tap into a $50 million grant promised in 2016 to help fund the project, and expects that – all going well – it could be installed in 2025 and replace the existing coke ovens at that time.

Gupta has boasted of his goal to be “carbon neutral” by 2030, but these plans appeared to be in trouble because of financing difficulties brought about by the collapse of his group’s main lender, Greensill Capital. Those issues now appear to be resolved.

“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,” Gupta said in a statement.

“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.”

South Australia premier Peter Malinauskas welcome the announcement, saying it fitted in with the state government’s plans to build a 250MW green hydrogen electrolyser by 2025, along with a 200MW green hydrogen power plant.

“Whyalla and the broader Upper Spencer Gulf has enormous potential to lead the world in green hydrogen production, helping decarbonise industry across the planet,” Malinauskas said in a statement

“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.

Gupta’s GFG Alliance says the company has already conducted successful trials for upgrading Whyalla’s magnetite pellets production to direct reduction grade, which is crucial for the process.

Operations will be overhauled with sophisticated mineral processing techniques at the mines, with state-of -the-art iron and steel making facilities, large scale hydrogen production and storage facilities all connected to renewable electricity generation.

It says the green DRI will be fed into Liberty Steel’s network of electric arc furnaces in Australia, Asia, Europe, and the UK, helping to decarbonise those steel supply chains

It says the transformation under the Whyalla CN30 (carbon neutral plan) is expected to grow the total permanent workforce numbers over the next seven years, as well as adding significant job opportunities during the construction phase.

Federal climate and energy minister Chris Bowen also welcomed the announcement, and linked it with the newly voted climate policy.

“After a decade of policy chaos, the passage of the Government’s Safeguard Mechanism reforms provides critical industries like steelmaking with the certainty needed for major investments in decarbonisation, helping to future-proof thousands of onshore jobs and ensuring a future made in Australia,” he said.

“The Australian steel industry generates $29 billion in annual revenue, employs almost 140,000 people across the country and will be absolutely critical to delivering the infrastructure Australia needs to become a renewable energy superpower.

““Peter Dutton and his No-alition voted against critical reforms like Safeguard Crediting, the NRF and the Energy Price Relief Plan. If the LNP had their way, Australian manufacturing would be crippled.”