Australia’s position as the world’s largest iron ore exporter is at risk if it does not gradually switch to green production methods, Fortescue Metals Group CEO Dino Otranto warned, adding that the country should consider the decline of its nickel industry as a case study to recognize the warning signs.
Australia stands at a critical juncture in its worldwide market leadership. Otranto said soaring demand for decarbonization was increasingly threatening Australia’s position as the biggest seaborne iron ore supplier. The Pilbara region’s coal-rich gardes, which had earlier been at the core of all iron exports, was also experiencing buyer disinterest, per a statement by Fortescue.
As investors pivot toward green steel, the fates of new projects, such as Australia’s Guinea’s Simandou mine, were also hanging in the balance, the statement said. Otranto’s warning serves as a wake-up call for producers to bring innovation and diversification in their approach so as not to lose their market dominance.
To mitigate the risk, Fortescue is pioneering green iron production with its Western Australian pilot plant, leveraging solar power and hydrogen to yield 1,500 tons of high-purity green iron annually. Competitors such as Brazil’s Vale, the second-largest producer of iron ore worldwide, have responded to this move by announcing intentions to construct an eco-friendly processing facility in Oman in collaboration with China’s Jinnan Steel Group.
“The message is, take the opportunity,” Otranto said, per Reuters. “We have an abundance of solar and wind… so the logical next step is to get into downstream industries.”
“That’s a high grade deposit going straight into the steel mills in China,” he said of Simandou.
“Let’s not sit here with our head in the sand thinking it’s not going to happen again.”
“The Chinese … built the biggest nickel industry the world has ever seen and … took out an entire market sector in four years,” he said, referring to Indonesia’s remarkable rise to nickel dominance, fueled by Chinese stainless steel giant Tsingshan’s strategic investments.
