Iron ore price hits 3-week low on firmer supply, softer steel outlook
China unveiled tax incentives on home and land transactions on Wednesday, aiming to support its crisis-hit property market.
Top global iron ore exporter Australia could lose as much as half its revenue from the sector if it fails to start producing green iron fast enough, as other countries start making steel using renewable energy, a think tank said on Friday.
Iron ore is Australia’s biggest export earner, but so far progress has been slow on developing green iron in the country.
Australia risks losing around A$69 billion ($45 billion) a year in revenue from the sector as global steelmakers decarbonize, including in China, and restructure their supply chains, according to a report from Sydney-based Climate Energy Finance.
However, should Australia manage to position itself as a leader in green iron, it could potentially double current revenue to A$250 billion a year.
Australia accounts for 56% of seaborne iron ore trade, according to government figures.
To avoid what could be “devastating economic consequences”, Australia needs “a suite of strategic national-interest policy and investment incentives to kickstart a green iron export industry”, the report said.
“In the global race to green iron exports, Australia has numerous competitive advantages – such as abundant and cheap renewables – that we must capitalize on,” said Marilyne Crestias at Clean Energy Investor Group (CEIG).
BHP Group, Rio Tinto and Fortescue all have green iron projects underway, with Fortescue set to produce green iron from a pilot plant next year.
Climate Energy Finance recommended Australia should develop a clean commodities trading company with South Korea and Japan, and the government’s Future Fund should provide A$20 billion to enable green metals processing.
It also suggested Australia’s trade bodies should work on an Asian Carbon Border Adjustment Mechanism (ACBAM) to create a premium price signal for Australian green iron.
($1 = 1.5300 Australian dollars)
(By Melanie Burton; Editing by Sonali Paul)
Read More: Fortescue sets out to meet strong Chinese demand for green iron
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