Liberty Steel has signed a contract aimed at ending the role of coal in steel production in Whyalla.
The $485 million deal with international equipment company Danieli for the construction of a new electric arc furnace will replace the old coke oven and blast furnace.
Sanjeev Gupta, executive chairman of GFG Alliance, which owns Liberty Steel, said the electric arc furnace would pave the way for green steel and green iron that could be exported around the world.
"This will put Whyalla firmly on the map, not only decarbonising Australia's steel industry but also feeding the world with green iron, decarbonising steel supply chains all over the world," he said.
The electric arc furnace is part of GFG Alliance's plan to make iron and steel without carbon emissions.
Mr Gupta said the furnace could reduce the Whyalla steelworks' emissions by 90 per cent by 2025.
Good news for SA exports
SA Premier Peter Malinauskas said if the electric furnace could be powered by renewable energy, it would allow Whyalla to produce iron and steel without any carbon emissions.
"Because producing steel makes so much carbon, it's a massive contributor to global carbon emissions so it's hardly surprising that the Whyalla steelworks is our biggest emitter as a state," he said.
"By decarbonising that, using hydrogen we set up the state to export green iron or green steel."
Mr Gupta said the production of green iron and steel would create another 1,000 permanent jobs in the city, in addition to the "thousands" of jobs during construction.
Construction of the arc furnace is expected to take about two years, with Mr Gupta saying work will begin within a year.
