The Full Federal Court has dismissed appeals by BlueScope Steel and its former general manager of sales and marketing, Jason Ellis, against earlier Federal Court decisions in a civil cartel proceeding brought by the Australian Competition and Consumer Commission (ACCC). The decision was announced on August 29. The Full Court upheld earlier findings that, between September 2013 and June 2014, BlueScope and Mr Ellis attempted to induce eight steel distributors in Australia, and an overseas manufacturer, Yieh Phui, to enter agreements to fix and raise the level of pricing for flat steel products supplied in Australia. This decision means the highest penalty ordered for a competition law breach of $57.5 million against BlueScope, and a penalty of $500,000 against Mr Ellis, remain in place. “We are pleased that today’s Full Court decision has endorsed the findings made by the Court, and the penalties imposed,” the ACCC´s acting chair, Catriona Lowe, said after the decision. “This case involved an attempted cartel which, if successful, could have created significant damage across the economy, as well as to customers and other businesses that compete fairly,” she added.

Also on August 29, BlueScope posted a statement on its website, saying: The Federal Court of Australia today declined to allow BlueScope’s appeal against the civil proceedings brought by the ACCC relating to matters occurring over a decade ago, in 2013 and 2014. BlueScope accepts the Court’s decision, bringing this long-standing matter to a close.

The ACCC says a cartel exists when businesses agree to act together instead of competing with each other. Conduct can include price fixing, sharing markets, rigging bids and controlling the output or limiting the amount of goods and services. In August 2019, the ACCC instituted civil cartel proceedings against BlueScope and Mr Ellis. In October of that year, Mr Ellis was charged with two counts of inciting the obstruction of a Commonwealth official, by encouraging two other BlueScope employees to give false information and evidence to the ACCC. He pleaded guilty and, in December 2020, was sentenced to eight months imprisonment, but was immediately released on a recognizance order. In December 2022, the Federal Court found that BlueScope and Mr Ellis engaged in cartel conduct in relation to the supply of flat steel products in Australia. In August 2023, the Federal Court ordered BlueScope and Mr Ellis to pay their respective financial penalties.

To other matters, the debate over reducing emissions in the steelmaking process has drawn comment from InfraBuild´s CEO, Francisco Irazusta. InfraBuild uses electric arc furnaces (EAFs) in Victoria and New South Wales to produce about 1.4 million tonnes of steel each year. EAFs use scrap steel and electricity, thus significantly cutting greenhouse gas emissions. Mr Irazusta said in a company statement that InfraBuild has built one of the nation’s largest steel recycling systems, collecting and processing scrap from construction sites, industry and households. “This circular economy approach means the steel going into Australia’s next generation of clean infrastructure may have had several previous lives. Old becomes new, and infrastructure is rebuilt without endless extraction from the earth,” he said.

However, in the past two months both Rio Tinto and BHP have sought to downplay Australia’s prospects of building out a “green iron” sector which would help decarbonise the steel industry. Rio cited a lack of economic incentive. This is despite the fact the federal government in February allocated $1 billion to support the manufacture of green iron and its supply chains. Also, in July BHP said it was too costly for Australia to build a green iron industry. One problem is that, because Australia’s iron ore is mostly too low-grade to be directly processed into steel with renewable energy, it needs an additional processing step. When this is undertaken with hydrogen made from renewable energy instead of coal, the product is called hydrogen direct reduced iron (DRI) or “green iron”, a low-carbon base for making green steel.

“Today, I don’t believe there is an economic incentive for anybody to move to a hydrogen DRI,” Rio Tinto’s chief technical officer, Mark Davies, told a business lunch in Melbourne in early August. The technology was unproven, he said, and there were complications moving from existing processes using natural gas to hydrogen. In late August, Fortescue posted its smallest full-year profit in six years. Subsequently, the company said a trial production plant for green iron, using hydrogen instead of coal to initially produce 1,500 tonnes to meet demand from its China-based steel customers, would now start from 2026 rather than this year. That said, Fortescue reaffirmed its commitment to its green plans. “The vision is quite clear,” said Dino Otranto, the metals division CEO. “In Australia we’re blessed with a lot of iron ore and we are blessed with a lot of free sun and wind”.

Meanwhile, the Institute for Energy Economics and Financial Analysis (IEEFA), has said if Australia wants to lead the world in establishing a green iron trade, it needs to prioritise projects which will produce green hydrogen for ironmaking. The IEEFA´s lead steel analyst, Simon Nicholas, commented: “Smarter subsidies are required that forget targeting green hydrogen exports and instead support realistic, domestic use in sectors that already use hydrogen, including direct reduced iron (DRI)”. The IEEFA is a non-profit, non-partisan, global organisation which provides evidence-based information for investment and policy decisions.

Finally, ASN would like to draw readers´ attention to the NSW Infrastructure Pipeline. Hosted on the Infrastructure NSW website, the tool helps steel industry participants to plan and resource for government engagement, bidding, procurement, contractor partnering, planning and mobilisation. The Pipeline includes infrastructure projects with a minimum capital value of $50 million; such as those for commercial, education, health, justice, open space, renewable energy, transport and water infrastructure. Infrastructure NSW head of strategy, planning and innovation, Said Hirsh, will talk about the Pipeline at the Australian Steel Institute´s National Convention on Tuesday, September 16 in Sydney.