Whyalla Steelworks Blast Furnace

Mr PATTERSON (Morphett) (15:02): My question is to the Premier. Will the government guarantee that the blast furnace at the Whyalla Steelworks won't be turned off?

The Hon. A. KOUTSANTONIS (West Torrens—Minister for Infrastructure and Transport, Minister for Energy and Mining) (15:02): There is an indenture agreement in place that requires the holders of the mining licence in the Middleback Range to produce steel. We would expect that to be honoured. Ultimately, we would like to see a direct iron reduction facility electric arc furnace replace the blast furnace. The blast furnace is technology that is going out of fashion fast. It is carbon intensive, energy intensive and inefficient. It is expensive, and when you make unfinished products they are a loss-making exercise for Whyalla. However, direct iron reduction is a decarbonised process that allows hot briquetted iron to be produced and exported or used in an electric arc furnace. This maintains the connection between the mines and the steelworks, which is what the indenture is all about.

There are a number of people in this country who would like to see a separation between the steelworks and the iron ore resources, because the iron ore resources do incredibly well on their own. But we will always keep them linked. This government would never allow the decoupling of the iron ore mines and the steelworks. That indenture, set up by previous governments, was an exceptional piece of legislation. That legislation ensures that the people of Whyalla know that they don't just have mining jobs but they have steelmaking jobs as well, and steelmaking jobs are vitally important.

So, as far as we are concerned, in the absence of a direct iron reduction facility electric arc furnace, the blast furnace is essential to maintain the appropriate legal ownership or mining licences over the Middleback Range. Anyone attempting to shut the blast furnace would instantly probably forfeit those mining licences, as that would be in breach of the indenture. The indenture, which has granted a great deal of benefit to the people who own and operate the mines and the steelworks, needs to know that the mines and the steelworks are linked.

That ore will be processed. Excess ore can be exported, but that ore will be processed in Whyalla, turned into iron and steel and we will make rail line and structural steel. That is the agreement we have in place for this wonderful resource of haematite that has seen Whyalla through thick and thin and now magnetite which is sought after by European, Asian and North American countries for its potential for decarbonisation and green iron and green steel.

The member might be aware—and I am sure he is—of the panic amongst haematite miners about the move towards green iron and green steel—

An honourable member interjecting:

The Hon. A. KOUTSANTONIS: Sorry?

An honourable member interjecting:

The Hon. A. KOUTSANTONIS: That's a deep, thoughtful question. What we have is what the world needs and because we have what the world needs we have a responsibility not just to mine it but to add value to it here in South Australia. The member for Giles is committed to this and this government stands behind him and his community. We are not going to let the people of Whyalla down.