While Hawsons Iron has slowed activity on the bankable feasibility study (BFS) for its namesake magnetite project, the world hasn’t lost sight of the project’s importance.
Hawsons Iron non-executive chair Dave Woodall said at the company’s recent annual general meeting (AGM) that letters of intent for approximately 50 million tonnes per annum (Mtpa) of Hawsons’ Supergrade product had been signed over the last 12 months.
Woodall said an ensuing ASX announcement would provide greater detail on the specifics of these letters of intent once Hawsons had received approval from its partners to publish their names.
This is a significance endorsement for what is already regarded as one of Australia’s – if not the world’s – most important iron ore projects.
In its September report, ‘Pedal to the metal’, which contemplates iron and steel’s $US1.4 trillion shot at decarbonisation, Wood Mackenzie said Hawsons Iron would be critical if Australia is able to “compete in a 1.5°C world”.
WoodMac’s 1.5°C accelerated energy transition scenario (AET-1.5) is a scenario in which global temperatures since pre-industrial times are limited to 1.5°C by the end of this century and the world reaches net-zero by 2050.
When it comes to iron ore, the higher the grade the better, and this is especially so when considering the growing global decarbonisation narrative.
Hawsons is aiming to produce a 70 per cent iron (Fe) product when operations are up and running, which is poised to be one of the highest-grade Fe products on the seaborne market.
To put it in perspective, BHP’s Western Australian Iron Ore (WAIO) operations have historically produced iron ore at 61 per cent Fe. This will increase to 62 per cent once BHP’s South Flank operation has ramped up.
But how does this benefit steelmakers?
Hawsons Iron said that while steel is a critical ingredient to the manufacturing of cars and construction products, it accounts for around 7 per cent of the world’s annual CO2 emissions.
“About 70 per cent of steel is produced using coal in oxygen blast furnaces,” the company said in its 2022 annual report. “These furnaces create emissions during the iron-making process when fed iron ore, coke and minerals used to remove impurities.
“Making one tonne of steel this way requires about 770kg of coking coal; and for every tonne of steel produced, almost two tonnes of carbon dioxide is created.”
Hawsons Iron said that in order to reduce steel’s carbon footprint, steelmakers are expected to transition from traditional blast furnaces to green hydrogen-based direct reduced iron (DRI) processes.
“DRI technology requires a feedstock of high-grade, low-impurity iron ore like Hawsons Supergrade to produce low-to-zero-emission green steel,” the company said.
“According to Boston Consulting Group, steel products made with high-grade, low-impurity, magnetite concentrate and green hydrogen DRI-electric arc furnace (EAF) have the potential to reduce emissions by up to 55 per cent compared to blast furnace production.”
Without projects like Hawsons Iron coming online, Australia and the world risks not having access to the resources needed to drive down emissions in steel manufacturing, with major climate ramifications to result.