Event: Jennifer Westacott, Mark Vassella and Jason Economidis interview with Kieran Gilbert, Afternoon Agenda, Sky News
Speakers: Kieran Gilbert host, Afternoon Agenda, Sky News; Jennifer Westacott chief executive, Business Council of Australia; Mark Vassella managing director and chief executive officer, BlueScope and Jason Economidis chief operating officer, South32
Topics: Strong Australia Illawarra; infrastructure; manufacturing; regions; transport; decarbonisation; employment; supply chain; exports; frontier economy; growth

E&OE

Kieran Gilbert host, Afternoon Agenda, Sky News: Welcome to the Strong Australia in Illawarra coming to you from Wollongong this afternoon. With me is Jennifer Westacott, the head of the BCA, Mark Vassella, CEO of BlueScope and Jason Economidis, Chief Operating Officer at South32. Great to see you all, we’ve had a really interesting discussion this afternoon. Mark, first you with BlueScope, you’re nearing 100 years of steelmaking in Port Kembla. A wonderful legacy. But also, you’ve got some very interesting plans for the future as well?

Mark Vassella managing director and chief executive officer, BlueScope: Yeah, thanks, Kieran. I mean a significant milestone for BlueScope, almost 100 years of steelmaking. We have our challenges as a steel industry, we’re dealing with decarbonisation. We also have a blast furnace reline project, a very large investment that’s under a feasibility study right now, which will be the bridge for us to the newer green steel technologies or low emission steel technologies that will emerge over the coming decades. And our ability to align and invest in those new technologies, as and when they become viable, is what I see as the investment future for the Illawarra region. So, a fantastic, a fantastic milestone but lots more to come in terms of investment in the region.

Kieran Gilbert: Well, you said you’ll be here for another 100 years. So that says to me that the government landed the safeguard mechanism for heavy emitters appropriately in your view?

Mark Vassella: Yes, there was great recognition from the federal government that some industries are just hard to abate, and the steel industry is one of those there’s others, but certainly the steel industry is technology challenged at this stage around emission. So, recognition in the safeguard mechanism of the hard to abate industries, and the decline rates that we can meet at this stage has been fundamental to us continuing to reinvest in the region.

Kieran: Jennifer Westacott, the steel industry obviously plays a big part in a whole range of industries, including renewable energy?

Jennifer Westacott chief executive, Business Council of Australia: Absolutely, well, there aren’t many wind turbines that don’t have steel in them. There aren’t many houses that don’t have steel in them. But the other thing that Mark’s doing is, what we really want the whole economy to do which is value add, the COLORBOND product, which is an incredible innovation. So, it’s playing a role in every aspect of the economy, but it’s going to be crucial to the decarbonisation agenda, if you think about all of that componentry for, for solar for wind turbines for everything that’s going to power up a clean economy.

Kieran: COLORBOND, that came out of this facility here in Port Kembla?

Jennifer: Absolutely. And then the things that you can do with the built form, so FormFlow, which kind of comes out of BlueScope. They’re building unbelievably energy efficient buildings using that FormFlow product, and you know, fire resistant, incredibly thermally efficient, low-cost energy, that’s the sort of stuff that BlueScope is able to sort of generate. And once we get renewables really going, the steel from BlueScope becomes less carbon intensive in terms of the production of the steel. And suddenly, our export markets are opening up again, because people look at the quality, the production cost, the low emissions production cost, suddenly we’re back in the game export.

Kieran: And there’s also the point, Jason, from your perspective that there’s not just the one type of coal, you’ve got the thermal coal, there are alternatives to thermal coal in energy. But in steelmaking, metallurgical coal, as you’re providing to BlueScope, and others, there is no alternative when it comes to steelmaking?

Jason Economidis chief operating officer South32: No, there’s no substitute for the metallurgical coal. And we believe that for the next 10 to 20 plus years, there won’t be so as a result, you know, our commitment is to providing high quality metallurgical coal to our customers, because that’s our best contribution to make sure that we’ve got low emissions products.

Kieran: There is a transition on though, how is South32 dealing with the energy transition and the pathway to net zero?

Jason: So, we’ve got a number of projects around the world that need the most attention, we speak locally, Illawarra is one. One of the things that we have is we produce a lot of methane. In our pre drainages we use that methane through EDL to provide energy, we provide enough electricity to power 60,000 homes. So that’s what we do with that. We’re also working on the balance of that. So, the methane the low period, the methane that comes out of our vents stream, we’re actually working on how do we destroy that to actually have no impact or a much lesser impact. So that is a project that we’re working on with the New South Wales Government and CSIRO to work on commercialising that opportunity. And once we get that commercialised that’ll be important for every gassy underground coal mine in the world.

Kieran: That is, they’re quite excited by that prospect Mark, in terms of rejuvenation or a new approach, you’ve got a bigger rejuvenation happening here at Port Kembla? 200 hectares of space, you’re going to have some urban renewal. Tell our viewers about that. Because anyone that’s been to Wollongong knows Port Kembla. This sounds like a very exciting prospect for the region.

Mark: A terrific opportunity. We’ve identified about 200 hectares of surplus land in and around the steelworks, so land that we don’t currently use and don’t envisage will use in the future. And we’re currently going through a master planning exercise with a globally awarded urban planning organisation out of Copenhagen in Denmark. They’re incredibly excited about the scale of this opportunity as we enter Jennifer and Jason’s point the 200 hectares where we can attract renewable energy industries, defence industries, high tech manufacturing in and around the steelworks. We think there’s an opportunity here to find employment for another 20 or 30,000 people in the region in related industries and use the infrastructure, the surplus infrastructure that we have as part of the urban planning exercise.

Kieran: Yeah, that renewal is quite something isn’t it, an iconic space for the Illawarra?

Jennifer: Yeah, and you could do something like what’s being done in Western Sydney, you can put an advanced manufacturing research centre there, from that you can put a skills hub, then you can bring in the other industries that are going to support the steel works in its next 100 years,  the opportunities are endless. But you can also create an incredible urban environment in terms of like, you know, great design, you know, water reuse the kind of circular economy when you’ve got 200 hectares of land, you can do a lot of very innovative things on it in that industrial side of things. And I think people forget that the diversification of the Australian economy is not, it’s not the digitisation of the Australian economy. That’s one aspect of it. But there is so much we could do around the industrial base of the economy and having a 200-hectare, greenfield site, you know, what you could do there in terms of powering up new industries is just endless.

Kieran: It’s such a low unemployment rate at the moment, how are you dealing with that, Jason, in terms of trying to get workers and skilled workers?

Jason: So, one of the things that we’re doing at the moment is making sure that we provide the opportunity for lots of different people to be able to work for us. So, from an inclusion and diversity point of view, one of the things that we’re trying to do is have a workforce that mirrors our background demographic. So, in doing that, we’re actually having to look at our rostering. We’re having to look at how do we actually have people for childcare, support people in childcare. How do we change the work environment so that anyone, whether it’s an ageing workforce, or whether it’s female participation, or anyone else, that we can provide the best opportunities for them to work in our industry?

Kieran: It’s still a big employer. Yours, isn’t it in Wollongong? What’s your plans in terms of attracting new people to work for you because it’s not easy right now? It’s a tight labour market.

Mark: It is a tight labour market. And I would echo the work that Jason and South32 are doing. We’re doing the same thing for our trades and operator staff, but equally, notwithstanding the challenges for the steel industry around decarbonisation, that’s attracting people in its own right. And I think in some ways, Kieran, we can create an environment here where it feeds on itself. People want to be part of the transition; they want to be part of the technological challenge and the engineering challenge. That’s decarbonisation. So, we’re finding people are attracted to that challenge. They want to be part of the transition. And if we can develop our urban master plan, attract other industries, it becomes a self-fulfilling prophecy in terms of attracting talented people working in those industries, how they can continue to learn and develop,

Kieran: Well, it’s a, it’s a sovereign capability that we can’t, we can’t lose. It’s not something you would want to see just shift offshore.

Jennifer: Well, absolutely. And then you can think about AUKUS and all of the things they’re going to hang off the AUKUS supply chain, in terms of production, and the sort of things that are going to be needed as part of that supply chain. But I think we learned a lesson in COVID, that we have to start to shore up our sovereign capability in key areas. But it’s also an opportunity to, I mean, we produce incredibly high-quality steel. We produce some of the world’s most high quality metallurgical coal. Why wouldn’t we back those advantages in? why wouldn’t we keep going with that? Because the big supply chains of the world, they need it. And we should be sort of opening that up thinking about where we can value add, because that’s going to take Australia to that frontier economy I always talk about, better jobs, high paid jobs, more skilled people. An economy with a two or three in front of its GDP number, not a one.

Kieran: And you touched on it, and you were in India with the Prime Minister recently, and it’s an insatiable demand for more steel in that country Isn’t it? And it’s growing. So, if that’s happening there, it’d be ludicrous if we were to just end our capacity here.

Mark: Sure, and more steel that’s produced from highly efficient coal. So, you’re right, there’s no, there’s no logic in exporting our industry exporting that carbon, only to turn around and send it back again. This is a global challenge around emissions reduction, it shouldn’t just be a local challenge. So, we need to think about this globally, and producing products here, from the most efficient, available natural resources makes all the sense in the world.

Kieran: And is green steel still a prospect in the foreseeable future? Or is it more about what Jennifer alluded to earlier in terms of the energy sources that you’re using or get cleaner, therefore, the product gets cleaner? Or do you see green steel as achievable?

Mark: It’s a global industry challenge. And it’s really being attacked on two fronts. There’s improving your existing processes and making them as carbon efficient as you can, whilst thinking about the future steelmaking technologies. We’re still some way off with those technologies in terms of their commercial viability. And they’re very dependent on enablers like raw materials, renewable energy, hydrogen, potentially, but you need to attack it on both fronts Kieran. And where we’re investing in that the steel industry globally understands the decarbonisation challenge, and they’re taking it on.

Kieran: Jennifer Westacott. Finally, to you, we’ve been recently in the Hunter, today in the Illawarra. What’s your message to the government a couple of days out from the budget as to how they can boost these regional and very important economies?

Jennifer: Well, I think, overall, we need a plan for growth. And we want to see in the budget those indicators that we’re going to try and grow the economy faster, but that’s about making really key investments in skills. It’s about investing in the infrastructure in key places, like the Illawarra, like the Hunter, like Western Sydney. It’s also about making it easier to attract investment. So, I’d like to see an extension of the expensing allowance, it’s because they bought a lot of investment in, it’s about making sure we can compete for these big projects, because if the United States keeps going with this inflation reduction thing, they’ll just suck a whole lot of investment into United States. Now we need to be competitive. So, we want to see something on investment making things easier to do. Obviously, I’d love to see a big skills package, not just about reskilling people, but about getting the skills for the industries that are going to power up the economy and finding faster ways of doing it.

Kieran: Jennifer Westacott from the BCA, Mark Vassella from BlueScope and Jason Economedis from South32. Thanks for being part of strong Australia here in Illawarra.