The electoral victory of Anthony Albanese has given some stability to the economic future of Australia and, as a consequence, to the steel industry. Principal among the beneficiaries of Labor´s success will be the Whyalla Steelworks which, it must be assumed, will continue to be assisted by the government. In February, when Whyalla fell into administration, Mr Albanese announced a $2.4 billion rescue package. Some of that money has already been distributed. During the election campaign, the Labor Party also reiterated its intention to increase the supply of affordable housing, the construction of which will require increased amounts of steel. The returning government has committed to spending $10 billion to build 100,000 homes over eight years in partnership with state developers, exclusively for purchase by first home buyers. It will also continue its Housing Australia Future Fund, another $10 billion program to build 40,000 social and affordable homes. Income limits under the First Home Buyers Guarantee will be abolished, allowing any first home buyer to purchase with just a 5% deposit. It is likely the expansion of the Help to Buy scheme will also offer a further stimulus to steel consumption.

In that scheme the government covers up to 40% of a home’s cost, which first home buyers can buy out at a later date. The incentive payments of up to $5,000 to apprentices in the construction industry may also help boost the building trade. All these measures have direct relevance to steel distributors, retailers and consumers. Additionally, the March quarter inflation figures, which came out a few days before the election, were welcome news. Annual inflation stayed steady at 2.4%, but the more important trimmed mean annual inflation dropped to 2.9% in the March quarter, from 3.3% in the December quarter. These figures may well encourage the Reserve Bank of Australia to lower interest rates at its next meeting on May 20.

Predictably, each month brings a new twist in the Whyalla Steelworks saga. The latest to emerge concerns Greensteel Australia (Greensteel), one of numerous companies owned by Mena and Romany Ibrahim. The brothers also own Reosteel, which is headquartered in Sydney and manufacturers finished steel products for the construction industry. On April 10, Greensteel announced it had placed an order with the global steelmaking infrastructure company, Danieli Group, to purchase stages two and three of its proposed ultra-low-carbon steel mill. The order, valued in excess of $1.6 billion, comprises a direct reduced iron (DRI) plant, two electric arc furnaces, a structural steel rolling mill with high-speed rail capability, and a second rolling mill for reinforced steel. The new order follows Greensteel’s order in October last year with Danieli for a single reinforced steel rolling mill. Delivery of the mills, electric arc furnaces and DRI plant is expected by late 2026 or early 2027. The equipment will be vital in Greensteel’s plans to establish Australia’s first ultra-low-carbon steelmaking operation. The Australian Financial Review has reported the plant was originally intended to be in Newcastle; however, the preferred location is now….Whyalla.

“Whyalla offers everything we need – an experienced workforce, a high-quality magnetite resource, port facilities and reliable renewable energy,” said Greensteel´s President and Executive Director, Mena Ibrahim, at the contract signing ceremony in Adelaide. “We have agreed on an expedited delivery timetable with Danieli. This will bring our steelmaking capability onstream within two years, creating over 1,500 permanent jobs and 2,500 jobs during construction. These are critical steps forward, especially given the uncertainty caused by the collapse of the existing steelworks in Whyalla and the gap it leaves in Australia’s sovereign steel capability,” he added.

Danieli Group CEO, Giacomo Mareschi, said: “We’re excited to be partnering with Greensteel in their plans to bring ultra-low-carbon steelmaking to Australia”. Mr Ibrahim said the new facility would be capable of producing ultra-long sections required for high-speed rail, currently not manufactured in Australia. The DRI plant would operate on hydrogen rather than coking coal to refine magnetite into iron pellets, enabling a cleaner steelmaking process. Elaborating upon the choice of location for this new venture, Mr Ibrahim said: “Greensteel’s proposed mill provides a clear way forward for the region. With the existing steelworks in administration, we believe our mill can be built in parallel, enabling a smooth transition for the workforce at the conclusion of that process. This is vital for the people of Whyalla and the local community”. Indeed, the proposed Greensteel site is adjacent to the existing Whyalla Steelworks.

Greensteel´s announcement came just days before a BlueScope Steel specialist team, which is advising the administrator of the Whyalla Steelworks, said the plant needs about $180 million in repairs and maintenance for operations to continue. The BlueScope advisors had been working for several weeks to help stabilise the plant’s operations and compiled a list of about 200 items that need attention. This additional cost will hamper plans by the administrator, KordaMentha, to sell the steelworks.

As the effects of the chronic under-funding of the steelworks at Whyalla are becoming increasingly clear, with the prospect of the plant closing down entirely, could salvation for the workers and community come from an unexpected source? Mr Ibrahim recently posted on his LinkedIn account that: “We are ready to transform Whyalla into the heart of Australia’s next-generation green steel industry with a fully-funded, steel-ready project that promises immediate action, thousands of jobs and a cleaner, sustainable future”. We shall see.