Australia has committed A$1 billion ($636 million) to support the development of green iron and its supply chains, including A$500 million in emergency funding to rescue the Whyalla steelworks in South Australia.
The move follows South Australia’s decision on Wednesday to place Whyalla—one of the country’s two steel plants—into administration due to unpaid debts. Premier Peter Malinauskas said the government aims to develop lower-carbon steel production in the state.
The bailout forms part of an A$1.9 billion joint state and federal rescue package for the GFG Alliance-owned steel plant. GFG, the commodities group led by Sanjeev Gupta, said it is reviewing its options.
Australia, the world’s largest iron ore producer, earned over A$100 billion from iron ore exports in 2023–24. The iron and steel sectors directly and indirectly support more than 100,000 jobs, government figures show.
With a federal election due by May, the Labor government is positioning green manufacturing as a key policy under its “Future Made in Australia” initiative. The plan seeks to leverage the clean energy transition to boost domestic industry and add value to critical minerals.
“Investment in green iron and steel will secure future demand for Australia’s iron ore as the world moves toward lower-emissions iron and steel,” the Department of the Prime Minister stated.
Australia faces a competitive challenge in the green steel transition due to the lower purity of its ore, which requires more processing to reduce carbon emissions. Major iron ore producers are already exploring ways to cut carbon from the steel supply chain to meet climate targets.
Fortescue plans to produce 1,500 tonnes of green iron using hydrogen at its Christmas Creek operations by the end of the year. BHP, Rio Tinto, and BlueScope Steel are jointly developing a pilot plant to produce low-carbon iron from Pilbara ores, announced in December.
Australian think tank The Superpower Institute estimates the country’s potential green iron and steel market at up to A$400 billion.
South Australia is seen as a key player in Australia’s green iron ambitions due to its deepwater port, high-grade magnetite reserves, an existing steel plant, and a high share of renewable energy in its grid.
Early-stage green iron technology companies involved in the sector include Calix, Element Zero, and Israel-based Helios Project.
