Senate Economics Legislation Committee [Part 2], , 2:32:22 to 2:47:43
The Department of Industry, Science and Resources discusses the Resources and Energy Quarterly report, focusing on steel production forecasts and the impact of the Whyalla blast furnace shutdown.
Topics: Manufacturing, Fossil fuels, Infrastructure
Speakers: Senator Susan McDonald, Dom English, Speaker 19, Speaker 1, Unknown Speaker
>> Thank you, Senator McDonald. Um, that concludes uh our questions for you. Thank you very much for joining us this evening. We'll take a very short um moment while we invite our next witnesses to the table. Thank you. Um, the committee now welcomes uh representatives of the Department of Industry, Science and Resources for Program 1.3, supporting a strong resources sector. And I think we will go straight into questions. Uh, and we'll kick off with Senator McDonald.
>> Thank you very much, Chair. Um, look, can I start with start with uh some questions around the September 2026 resources and energy quarterly that was recently uh released uh forecasting steel production. Do the fiveyear Sorry, I'll give you a second to sit down and My question is, do the 5-year Australian steel production forecasts to 203031 that were published in the September 2026 Resources and Energy Quarterly include steel production from Wella.
Apologies. I just need to locate some usual approach with the wreck while my colleague finds particular details is to uh publish on the basis uh forecasts on the basis of uh final investment decisions made uh across various projects or uh facilities in the sector. So um uh the question I just need to what particular account we took of Ella G given given the uh
>> I'm happy to wait a second because a few of my questions relate to this. So >> I'm on page 39 if that helps. Yeah, it's table 3.3 on page 39. And given this was published after the closure of IA, I'm going to assume that >> I think that's reasonable.
>> See if your next question I can be more helpful.
>> Well, okay. So my next question is is will you be revising your Australian steel production forecast given the announcement of the Wya blast furnace and what are the implications for the 5-year outlook for Australian crude?
Uh well Senator as I say the um process of uh uh preparing the estimates takes into account known changes in production activity across both projects and and and venues. So, um, if it tries confirming what was done for the September wreck, certainly it is a factor we'd need to take into account in
>> there's not a gotcha in this. It's it's just I'm working through a time.
>> I just don't want to mislead. Yeah.
apologies Fred Graham, acting general manager of the resource energy and industry insights branch. Uh so the RAQ forecast uh incorporate the recently announced sessation of the blast furnace operations at Wella from the September quarter 2026 uh with electric arcs furnace production assumed to continue from the December quarter 2026. As WHA production is primarily domestically focused, the change has a negligible impact on the RQ forecast for iron or steel export volumes and values
>> Okay. Um, do you see any other producer cover the 1.2 million tons a year capacity that Walla had?
But certainly without announcements about producers making commitments to other uh volumes or projects then I uh say I don't have information at this point that would suggest how that uh element of the market is going to
>> Sure. Thank you. Which other plants or expansions account for the increase over that 5-year outlook from 4.9 uh megat tons in 2627 to 6.06 in 203031.
>> Uh Senator, apologies. I don't have the specific uh facility level data available to me. You'll have to take that on notice.
sorry, I just want to go back. When you said about the electric arc furnace production, are you assuming that there will be that they will transfer their all their current production to the electric arc or were you just noting that there was some production through the electric
arc? uh noting that there is some production u I'll take on notice the specific volumes
>> right and and so there is some production currently happening already
>> uh no there is assumed to be some production in the December quarter
>> okay thank you for that clarification um do you have a a percentage an a number
>> no not not with me senator I'll take on notice
um okay so you're taking on notice what other plants for expansion uh could be responsible for that growth. How much of this forecast growth of around 1 million tons of additional crude steel would be contributed by green steel related products such as direct reduced iron or hydrogen-based production of green steel.
Senator, that would be detailed in the uh models of the um people who do the forecast that I would need to get out and answer your question on notice, I
think. >> Sure. Okay. Thank you. So on notice, on notice then, would you be able to identify which facilities would be producing this green steel and approximate tonnages, please?
>> To the extent possible.
I guess my my questions are around that it was why primarily that has been driving the the green steel narrative and uh and given Australia exports nearly a billion tons of iron ore each year. Um it was my understanding that the green steel narrative was supposed to convert a significant portion uh into tens of millions of tons of green steel. Um at least that was the narrative. But it doesn't seem that the dire forecasts would be reflective of that That'd be a fair comment.
>> Uh Senator, I think um the decisions of of uh one actor in the sector versus the incentives created by a range of policy uh initiatives um I think is a long jump to go from from that to the uh to the broader conclusion. I would need to um defer that those questions to my colleagues who deal with uh the industry sections from 1.2.
>> Okay. All right. So, so you think me saying that the green steel dream is dead uh might be premature, do you >> you definitely think so, Minister. All right. Or perhaps minister on notice you could provide me with the projects that you think will be able to provide the tens of millions of tons of green steel that we have been hearing about. Thank you. I look forward to that. Over the five-year outlook, do you expect domestic production of structural steel to come online to replace the lost sovereign capability at Wella?
>> Well, Senator, despite talking about iron or ua in response to your questions about steel, obviously uh the WA processes, um the forecasts that we make are about iron or uh production from Australia. So um I don't know that I have a basis for giving you a prediction at this point on steel production at um uh beyond what's in the in the wreck.
>> Okay. Yeah. It's just that um in this table 3.3 there is you know a line on uh steel production Australian production is something that the department generates and uh on notice then I'd like to know if you think there's any other facility that can provide the capacity that uh to replace
>> as I said we'll take it on notice but by definition though send the um the fact that the forecasts do already account for means there is uh expectations built in uh to the work that the team's done to uh project that level of steel production. So um the we will fill the question in with some more detail but um
>> thank you. >> Yep. There there's nowhere else in the report that we'd find green steel. I'm I'm not just, you know, missed it because I've looked primarily at this table 3.3.
>> No, it's not a I don't believe so.
>> Yeah, this would be the place. Yep. Good. Thank you. okay. We've we've already had commentary earlier today about how much Commonwealth support there's been for