Australia risks losing its leading role in the global iron ore market if it doesn’t quickly pivot to producing green iron, Fortescue CEO Dino Otranto warned on Tuesday. He highlighted that Australia’s nickel industry nearly collapsed under similar circumstances and urged swift action.
As the world’s largest seaborne iron ore supplier, Australia supplies about half of global iron ore, primarily from the Pilbara region. However, Pilbara’s lower-grade iron ore requires coal for steel production, making it less attractive as steelmakers shift toward decarbonized production, Otranto said at the IMARC conference in Sydney.
“The message is, seize the opportunity,” Otranto emphasized. “We have an abundance of solar and wind resources. The next logical step is to move into downstream industries.”
Otranto noted increasing competition from emerging green steel projects, especially in the Middle East, and the imminent start of operations at Guinea’s Simandou mine, a high-grade iron ore source set to supply China directly.
Drawing a parallel to Australia’s missed opportunity with Indonesia’s nickel industry, Otranto explained how China’s swift, innovative investment transformed Indonesia into a top nickel producer, leaving Australia’s industry at a disadvantage. “China built the world’s largest nickel industry in just four years,” he said, explaining the global impact on nickel producers, including those in New Caledonia and Australia.
He cautioned that Australia’s iron ore sector could face a similar fate if government and industry fail to address rising power costs. Collaboration is essential, particularly in bringing in affordable Chinese-manufactured solar panels and wind turbines, alongside automated installation technologies to reduce labor costs for green iron production.
“The world needs Australia’s iron ore to sustain steel production,” he said. “We cannot let this opportunity slip; we must work harder than ever.”
Fortescue, the world’s fourth-largest iron ore producer, plans to use green hydrogen from solar farms at its Christmas Creek site, with the goal of producing 2,000 tons of green iron annually starting next year.
Meanwhile, Brazilian mining giant Vale recently announced a partnership with China’s Jinnan Steel Group to establish an iron ore beneficiation plant in Oman, producing high-quality iron pellets for global markets.
