GREENSTEEL: The Future of Sustainable Steel

Liberty Primary Steel

7. Affordable and Clean Energy 8. Decent Work and Economic Growth 9. Industry, Innovation and Infrastructure

Overview

Liberty Primary Steel is the largest producer of steel products in Australia and as a result plays a pivotal role in supporting countless Australian industries. In order to increase production to allow for growth as well as transition to the eventual production of carbon neutral steel whilst ensuring that local communities develop with these changes, 'GREENSTEEL" manufacturing processes are required. For the Whyalla steelworks, this GREENSTEEL manufacturing approach involves an overhaul of the existing iron facility, furnace, rolling mill as well as how these are all to be powered going forward. In adopting this revolutionary approach, Liberty Primary Steel will greatly contribute to the processing and use of affordable clean energy, economic growth that is sustainable and finally innovations in the industry that will support future infrastructure needs.

Author

Callum Kimpton

Callum Kimpton

School

Monash University

Monash University

Professor

Gitanjali Bedi

Gitanjali Bedi

Innovation

The Liberty Primary Steel plant, located in Whyalla, is approximately 400km north-west of Adelaide and a subsidiary under the larger umbrella that is the Gupta Family Group also known as GFG Alliance. The steelworks has passed hands many times in its long history, most recently in 2017 when it was bought by GFG after the previous owner Arrium had passed into receivership. This purchase saved an estimated 3,000 jobs in Whyalla, a town of only 22,000 (Evans, 2020a) and presented itself as an opportunity to revolutionize the way in which Australia’s number one steel products producer operated.

Sanjeev Gupta is the executive chairman of GFG Alliance and has previously committed GFG to being entirely carbon neutral in its operations by 2030 (GFG Announces Updated Plan To Transform Whyalla Steel Into A World Leading “GREENSTEEL” Facility - LIBERTY Steel Group, 2020). Whilst this move is fraught with challenges it also welcomes a multitude of opportunities, including the proposed rejuvenation of the Whyalla steelworks aiming to more than triple production as well as being the worlds first primary steelworks to adopt the carbon neutral ‘GREENSTEEL’ manufacturing approach. This innovation essentially entails the construction of a Direct Reduced Iron facility, a new Electric Arc Furnace and a new heavy-section rolling mill all to be powered predominantly by hydrogen produced from renewable energy sources. Ultimately these innovations usher in a number of unprecedented changes to the steelworks with some business leaders within Liberty never having “heard any conversations as big as where he [Gupta] is going.”


GREENSTEEL: The Future of Sustainable Steel

Inspiration

For Gupta and GFG, this innovation was inspired by both a need to take on responsibility for the environmental shortcomings of the steel industry as well as an opportunity to increase output whilst ensuring that the Whyalla steelworks could sustain its operations into the future and be a market leader. The steel making industry is responsible for around 7-9% of global greenhouse gas emissions from fossil fuels (Gupta, n.d.a) thereby making it one of the most polluting industries globally and in turn creating an environment where “businesses are under pressure to be more sustainable.” Additionally, advancements in hydrogen technology have given GFG a platform to not only hugely reduce their carbon footprint but also greatly increase production from the current 1.2 million tonnes per annum (LIBERTY Primary Steel Whyalla Steelworks - Liberty, n.d.).

Overall impact

The full business impact of this innovation is yet to be felt for many of those leaders at Liberty Primary Steel due to completion of these upgrades being scheduled to be completed by 2024 (Evans, 2020b). However, “because the scope of these changes is within that [five year] threshold I think that what we will see is very clearly that the next two or three years we will be planning as per usual but then we will start seeing a little bit more of what this is going to mean for the business.” However during this transition period there has been a large focus on improving the existing operations and making them as efficient as possible in order to make the future plant changes as seamless as possible.

The steelworks is very much at the centre of Whyalla both economically and socially and therefore such monumental changes to the status quo have had an impact on the people of Whyalla. Although the general perception of the movement towards GREENSTEEL production is one of excitement “there are still a lot of people that are non-believers around.” However those more closely involved in the transition can “come out of those discussions and become really inspired by it and the drive is very clear and the passion is clear towards it.”


Business benefit

As mentioned previously, the focus in the short term has been to streamline production thereby making the plant as a whole more profitable. However, in the long term “there is the GREENSTEEL drive but then there’s also opening up capacity” from the current 1.2 million tonnes per annum. This increase in capacity therefore obviously has great potential to in turn increase profits. Furthermore, costs will be reduced in the long run after phasing out the use of natural gas to power the new plant and instead using renewably sourced hydrogen from the Cultana Solar Farm which is currently under construction just north of Whyalla and capable of producing 280 MW (Cultana Solar Farm, 2021) which will “have long term benefits in terms of cost and profitability.”

Social and environmental benefit

The steelmaking process is one that is extremely energy intensive, traditionally producing 1.89 tonnes of carbon dioxide for every tonne of steel manufactured (Gupta, n.d.b). Therefore the environmental benefit of producing carbon neutral steel that is largely renewably powered is colossal and sets a precedent for other primary steel plants across the globe to reduce their carbon footprint.

Such a large development would also create a great number of jobs in the area in turn further bolstering the local economy and allowing “this town [to] grow again.” Furthermore, tourism and other industries are expected to thrive in the wake of this development as “he [Gupta] talks about this big hotel and all these other things to come into play” in the near future, referring to the proposed 150 room hotel that has been announced in 2018 (Spence, 2018).

References:

Evans, S., 2020. Gupta plans $1b overhaul of Whyalla steelworks. [online] Australian Financial Review. Available at: [Accessed 27 January 2021].

Gupta, S., n.d. Liberty Steel: A vision for carbon neutral steel by 2030. [online] LIBERTY Steel Group. Available at: [Accessed 28 January 2021].

LIBERTY Steel Group. 2020. GFG Announces Updated Plan To Transform Whyalla Steel Into A World Leading “GREENSTEEL” Facility - LIBERTY Steel Group. [online] Available at: [Accessed 27 January 2021].

Libertygfg.com. n.d. LIBERTY Primary Steel Whyalla Steelworks - Liberty. [online] Available at: [Accessed 29 January 2021].

Simecenergy.com.au. 2021. Cultana Solar Farm. [online] Available at: [Accessed 30 January 2021].

Spence, A., 2018. Gupta reveals plans for massive Australian steel revival - The Lead SA. [online] The Lead SA. Available at: [Accessed 30 January 2021].


Interview

Hayley Perkins, Supply Chain Planning Manager

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Liberty Primary Steel

Liberty Primary Steel

Whyalla, South Australia, AU

Business Website: https://www.libertygfg.com/liberty-primary-steel/

Year Founded: 1992

Number of Employees: 10000+

Gupta Family Group Alliance (GFG Alliance) is a global leader in sustainable development in the fields of energy, mining, aluminum and steel industries with an aim to modernizing industrial sites all over the world. This is done by making them profitable and carbon neutral in the long run whilst simultaneously ensuring socially sustainable development in the local communities. One of their largest innovations of late is the transition of the Liberty Primary Steel's Whyalla plant to 'GREENSTEEL' manufacturing processes. This would be the first primary steelworks to transition to 'GREENSTEEL' and as such forms an integral part of GFG's plan to be carbon neutral by 2030 whilst also increasing production to support to growing infrastructure needs of Australia going forward.