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  • Rikki Lambert

SA's Iron kings trump Iron Boomerang for Aussie steelmaking - if only they had a champion

- with Wayne Phillips

The Whyalla steelworks near Iron Baron in South Australia

Renegade Queensland MP independents and Coalition backbenchers have been talking up reinvigorating steel manufacturing in the 'Iron Boomerang' initiative, but as discussed on FlowFM - SA has Iron Kings ready to rule them all.

The COVID-19 pandemic, its attendant recession and Chinese trade sanctions against some Australian exports has led to renewed interest in revitalising Australian steelmaking, manufacturing, national security and self-reliance.

Yet the advocates for this revitalisation appear to be in Australia's northern states, talking about placing steelmaking capacity near the Pilbara in north-western Western Australia - where copious amounts of iron ore is mined and exported raw offshore, connected to coal-fired power capacity in northern Queensland.

Queensland One Nation senator Malcolm Roberts has met with the proponents of 'Iron Boomerang' and tweeted earlier this year:

The mud maps of what Iron Boomerang would look like are highly ambitious, horizontally linking north Queensland with northern Western Australia straight across the Northern Territory's midriff.

Advocacy group Advance Australia promoted on Sunday the idea of Australia producing more of its own steel rather than be a 'net importer'. They quote independent north Queensland MP Bob Katter saying:

“Here’s an idea – let’s make the steel in Australia. We have an abundance of iron ore and coal. The major parties continue fooling around with their free market ideology. Aussies are crying out for domestic manufacturing.”

FlowNews24 spoke recently with Tony Lawry, spokesperson for Leigh Creek Energy, a proponent of carbon capture and storage and urea fertiliser production at the former 'brown' coal site at Leigh Creek, in northern South Australia. The imminent commencement of construction of that project, revitalising the former coal mining town, will leverage off pre-existing infrastructure:

"We will provide for our own power requirements on site. We will use the rail network to transport goods from Port Augusta up on to site and then the product from site back to Port Augusta. A lot of that infrastructure is already in place - all we really need to do is build the urea production facility on-site."
"It's a massive advantage for us that we don't need to build that (infrastructure) on site.

The same infrastructure opportunities exist at iron ore producing sites in South Australia - to varying degrees, at Iron Knob, Iron Duke and Iron Baron in the upper Eyre peninsula.

If the Marshall Liberal government or indeed the local federal or state member was interested in fearless advocacy for the state or electorate, they would be pushing back against federal efforts to shift steelmaking to the nation's north, and re-stoke the fires of South Australia's furnaces.

With the federal resources minister, Keith Pitt, confirming with FlowNews24 on Thursday that Napandee, near Kimba, is the federal government's proposed repository for low to medium level radioactive waste principally from medical purposes, the dots appear to be lining up in South Australia's favour. If there's someone bold enough to connect them, that is.

South Australia is rich in uranium deposits, which would fuel a nuclear industry. Northern Territory Coalition senator Sam McMahon has started making the case for using the Territory's inferior, but still substantial uranium resources for nuclear power.

All the magnetism on Australia energy, national and manufacturing security is dragging north, in the absence of strong advocacy in the south.

Granted, the local member for Grey, Rowan Ramsey MP, is on the same song sheet as his state and federal Liberal premier and prime minister in promoting 'green steel' for Whyalla. In other words, renewable energy and theoretical hydrogen energy driven energy production. Yet for the massive energy needs steelmaking requires, little wonder that Queensland coal advocates are looking to pair with Western Australian iron ore advocates for a bolder partnership than South Australia seems willing to offer.

The discussion is becoming critical as China begins to explore ways of doing to Australia on iron ore and copper what it has done to our winemakers and barley growers. As Dr Naoise McDonagh, lecturer at the University of Adelaide's Institute of International Trade told FlowNews24 on Monday, China targeted those commodities with punitive tariffs because they could find substitutes elsewhere on the global market.

Not so - yet - with Australian iron ore and copper.

Among other important warnings about the impacts of China's hostile trade position towards a host of Australian commodities, Dr McDonach warned that China is working towards building an alternate resource base to precious Australian mineral resources:

"(China) are trying to invest in countries in Africa to try and build up another capacity that they can import from but that would take many years to be finalised and even then because of the political instability in some of those countries, you don't have the reliability you have with Australia.
"So copper is kind of safe, but other goods and commodities that are more substitutable from other reliable exporters are in the target crosshairs and those industries really need to beware of the risk they re taking of trading into China."

Arguably, Chinese debt financing these alternatives would result in a default vertical integration arrangement where China, in effect, controls those resources.

Dr McDonagh also warned of the risks of not putting national security at the forefront of trading relations:

"A lot of industries have been accused of being heavily concentrated on China. But, in 2015-18 when the political relationship was reasonably stable, what else would individual businesses do but sell into a booming market? That's what they do, they're in business. They couldn't have foreseen how quickly and how badly relationships would have deteriorated. From an individual business perspective, that's their risk.
"Its only at the macro level what seemed rational individually can be a risk nationally for the country. That percentage of concentration in China exports goes up, and then the relationship deteriorates at the same time, suddenly you have this national security risk where this country may decide to try to influence decisions in Australia by utilising the economic leverage in a way most countries would not do.
"We talk about the rules based order, well China has been breaking the rules - there's wide agreement about that, they've been doing things illegally ... The government should - and it is - support diversification.

Whilst the Whyalla steelworks had anti-aircraft batteries set up during the war years to protect a vital resource, it is nonetheless a very long way for enemy forces to go to disrupt critical infrastructure.

As Darwin tragically learned, northern Australia is well within bombing range of enemy forces. Indeed, Chinese sovereign interests already have strong control over Darwin's port, much to the chagrin of patriotic Australians.

Revitalising South Australia's iron ore mining, refining and steelmaking capabilities not only diversifies our sources of steel, but is a strong step in the national security direction.

Sadly, nobody in politics seems willing to join the dots and make the case like northern Australian politicians are.

Wayne and Rikki discussed the situation on the Morning Show:


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