London, March 24th (Argus) - Recently, Australian methane pyrolysis developer Hazer Group signed a non-binding letter of intent to supply up to 85,000 tons of graphite to the proposed Collie steel plant of Western Australia's Green Steel over a period of 10 years. This marks the first commercial graphite purchase framework between the company and the steelmaking customer.
This transaction includes 8,500 tons per year of graphite, to be used as a carbon booster for the electric arc furnaces (EAF) planned by Green Steel to be built in Collie, replacing anthracite.
Green Steel is developing a steel plant that will produce 450,000 tons per year of rebar using recycled scrap steel, and is expected to start construction by the end of 2026 and achieve early operations in 2028. As their respective projects mature, both parties will strive to reach a binding agreement.
The pricing of graphite will be linked to the offloading price of unsmelted coal at the Port of Bunbury minus a 5% discount, meaning approximately 400 Australian dollars per ton (284 US dollars per ton) based on the price of unsmelted coal at 250 US dollars per ton plus transportation and processing costs.
Chief Executive Officer Glenn Corrie told Argus that once a binding contract is in place, "attractive pricing" could make the contract value "around 30 million Australian dollars".
The supply target is to start in 2030, and Corrie said that this transaction "for the first time" provides visibility on Hazer's graphite pricing.
Hazer's process generates approximately 3.5 tons of graphite per ton of hydrogen, and an emission of 85,000 tons per year means a related hydrogen production of approximately 2,400 tons per year. Hazer has not yet determined the specific projects to complete the supply, but Corrie said that potential candidate projects under evaluation include its FortisBC project in Canada and other potential projects in Australia and globally. In the Green Steel transaction, hydrogen production has not yet been obtained.
Hazer is also actively involved in other steel industry projects, including work with Korean steelmaker Posco and Australian metals group M Resources. Corrie said that Hazer graphite can also play a similar carbon booster role at Whyalla Steelworks, and Hazer is seeking to provide its technology in the bidding for M Resources' project while also obtaining the remaining graphite from larger projects.
In addition, Hazer announced today that its engineering partner KBR has collaborated with FortisBC in British Columbia to accelerate the work on a 2,500-ton per year hydrogen and 9,500-ton per year graphite project. When both parties finalize the commercial framework for the next development stage, KBR will undertake the development engineering at a specific location and refine the project economics.
