BlueScope Steel Ltd.’s international consortium targeting the distressed Whyalla steelworks represents a strategic convergence of Asian steelmakers pursuing green hydrogen technologies, despite recent tensions between the key partners.
POSCO Holdings Inc. and Nippon Steel Corp. are unwinding their two-decade cross-shareholding relationship, with both companies selling their stakes in each other this year. Yet they’ve joined forces with India’s JSW Steel Ltd. in BlueScope’s bid for the South Australian facility, underscoring the project’s strategic importance.
POSCO has already committed up to A$27 billion to develop green iron production in Western Australia, targeting 12 million tonnes of hot briquetted iron annually. The company views Australia as crucial for securing low-carbon steel materials as it transitions toward carbon neutrality by 2050 through hydrogen reduction steelmaking technology.
Nippon Steel is separately exploring a ¥100 billion ($733 million) green steel project, with Australia among the potential sites due to high-grade iron ore access and cheaper electricity than Japan. However, critics argue the company has delayed substantial emissions reductions until after 2040, creating “empty decades” of insufficient climate action.
The consortium plans to replace Whyalla’s coal-fired blast furnace with an electric arc furnace and direct reduced iron plant powered by green hydrogen, potentially cutting emissions by 90%. South Australia’s proximity to the proposed world’s largest hydrogen electrolyser positions the facility as a potential green steel hub.
The partnership reflects broader industry consolidation as steelmakers race to secure positions in the emerging low-emissions market, despite mounting pressure to abandon traditional blast furnace operations.
