AWARDS FINALIST: New Zealand Steel – The New Zealand Steel Electric Arc Furnace - securing the future of steel making, a strategic asset for NZ
New Zealand Steel has started making some of the world's lowest-carbon steel, using an electric arc furnace at its Glenbrook mill.
The country's sole producer of flat rolled steel products has just achieved first commercial production from the new furnace after breaking ground on the $300 million project in June 2024.
The company says the furnace cuts annual greenhouse gas emissions from Glenbrook by more than 45 per cent and secures the future of the domestic steel industry.
"The project has exceeded a million hours of construction effort to get us to this point today," says BlueScope chief executive for Australia and New Zealand, Robin Davies.
"It marks the beginning of new opportunity as we leverage the full potential of EAF steel production in New Zealand, which includes supporting growth in Auckland and the wider economy through the availability of quality lower-carbon steel product for the built environment.
"We've produced the first heat just over two years after breaking ground and been able to undertake this significant business transition within a fully operational steelworks, continuing to produce the usual 650,000 tonnes of steel to ensure uninterrupted supply to the domestic sectors that rely on it."
Partners
The furnace was custom designed by Italian technology supplier Danieli to operate in a hybrid configuration, combining molten iron with scrap steel.
Contact Energy, which has built a 100-megawatt battery energy storage system next door and has started work on a second one, is providing a power-purchase agreement for the furnace's 30 MW average annual consumption.
New Zealand Steel also partnered with Sims and GMS on long-term supply agreements for scrap steel, diverting hundreds of thousands of tonnes of scrap from being exported to instead heading for domestic recycling at Glenbrook.
"Projects of this scale rely on partnerships, and this one is a world-class example of a successful public-private investment partnership with the New Zealand Government co-investing up to $140 million," says Davies.
New Zealand Steel's sister company, Pacific Steel, will be the first firm to bring the new lower-carbon steel product to market. Later this year, it will launch PACIFI as the new standard for locally made steel, while PACIFIC DCRB will set a new benchmark for one of the lowest-carbon products available for locally made reinforcing steel in New Zealand.
Development
The $300 million project at Glenbrook is the largest single-site industrial decarbonisation investment in New Zealand's history.
BlueScope-owned NZ Steel invested $160 million, supported by $140 million from the Government Investment in Decarbonising Industry fund. Once fully commissioned, it will slash emissions by between 800,000 and 1 million tonnes of carbon equivalent every year.
The project replaces the existing oxygen steelmaking furnace with an electric arc furnace that uses electricity from the national grid to melt scrap steel and blend it with molten iron.
It required replacing Glenbrook's oxygen furnace and two of the four coal-fuelled kilns, cutting coal consumption at Glenbrook roughly in half, a reduction of more than 400,000 tonnes a year.
New Zealand Steel says the electric arc furnace forms part of a broader transformation of its Glenbrook operations, which currently produces about 650,000 tonnes of steel slab and billet a year using locally sourced iron sand.
The company announced its intention to install the furnace in May 2023.
Execution began in September 2023 following board approval, with civil works following the next month. Breaking ground commenced April last year and then cold commissioning in December.
The annual Energy Excellence Awards will be held in Wellington on 19 August. New Zealand Steel is a finalist in the Large Energy User Initiative of the Year Award, sponsored by the Energy Efficiency and Conservation Authority.