【By Guan察者网, Liu Bai】Iron ore trade is a vital pillar of China-Australia economic relations. How to achieve green and low-carbon transformation in this new historical era has become one of the focal points of the Australian Prime Minister's visit to China.

"China's opportunities make Trump's tariffs insignificant," an article published by Australia's Sydney Morning Herald on July 15 titled so pointed out that China is firmly fulfilling its emission reduction commitments, while Australia has great potential in building a green metal industry using renewable energy, which presents new cooperation opportunities for both sides. Especially through the production of high-value "green iron" (green iron) using renewable energy, it holds profound significance for the Australian economy and could become another milestone in China-Australia iron ore trade.

"Green iron" is a substance similar to pure iron (95%) produced from iron ore without the use of hydrogen or coal. This process uses low-temperature electrolysis and is powered by renewable energy, helping to reduce the carbon footprint of the steel industry.

Exactly in the field of renewable energy, Australia has great potential. Due to the abundant sunlight, Australia only needs to install solar panels on 2% of its land to generate electricity, which can meet the global power demand on its own.

"This example precisely illustrates how abundant this resource is," said Henrik Stiesdal, a pioneer in the renewable energy field in Denmark and the father of modern wind power in Europe.

"Australia has almost the world's best solar and wind energy resources. I don't see any other place with such potential," he added, "although some groups in Australia are not fond of renewable energy."

Of course, Australia cannot supply electricity to the entire world. Australia can indeed transmit electricity to other countries via submarine cables, such as transmitting solar power from the Northern Territory to Singapore, meeting about 15% of its electricity demand. However, laying cables across to Europe or North America is obviously impractical.

Rio Tinto Group mining iron ore in the Pilbara region of Western Australia. Visual China

However, energy does not have to be transmitted in electronic form. Australia's energy can also be exported in the form of green metal products, that is, using Australia's abundant and cheap renewable energy to produce metal products locally and then export them.

During this visit to China by the Australian Prime Minister, "green iron" was one of the key focuses.

In Shanghai, Albanese chaired a meeting between Australia's four major mineral companies and Chinese steel enterprises, aiming to explore new areas of metal trade between the two countries, not just raw ore mined underground, but also processed products, that is, "green iron," which has a value two to three times that of raw ore.

Stiesdal said that sometimes he feels Australia is like a developing country, exporting raw materials and then buying back manufactured goods. But now, Australia has the opportunity to become more like a developed country.

Ross Garnaut, an Australian economist and former economic advisor to former Prime Minister Bob Hawke, evaluated the importance of Albanese's visit to China as significant as Bob Hawke's 1984 visit, which opened up China-Australia iron ore trade.

Since then, ore trade has developed from a trickle into Australia's largest export industry, with a scale of 116 billion Australian dollars (about 545.3 billion yuan) in the past fiscal year alone.

"This is the future of Australia's economy!" As for Trump's tariffs on Australian exports, Garnaut said they were "insignificant." He said that although Trump's tariffs do pose risks, the real threat is not on Australia-US bilateral trade, but rather the potential to disrupt global economic stability.

Australian media noted that countries such as China, Japan, and South Korea have all announced net-zero emission schedules. The cheapest and most feasible way to achieve these goals is to import "green iron" from Australia and then process it into steel domestically.

Andrew Forrest, CEO of FMG, the third-largest iron ore producer in Australia accompanying Albanese on the trip to China, said that the Chinese determination to achieve energy transition is firm, "they will definitely make cities green and skies blue." FMG has committed to producing "green iron" in Australia.

"Australia must establish a green metal industry. We must break through doubts," Garnaut said. "In a carbon-neutral world, we must surpass the milestone created by Hawke in 1984. Now it is clear that China will provide the necessary support."

The report pointed out that building a green metal supply chain is not only about the prospects of exporting "green iron" to China, but also about whether Australia can maintain its existing iron ore trade.

Garnaut warned, "If we cannot export iron in the form of metal, we will lose this trade."

Moreover, Garnaut said, it is also about the Earth's environment: "It will determine whether the world can cope with climate change and achieve net-zero greenhouse gas emissions."

A research report shows that if Australia installs solar panels on 0.5% of its land and wind turbines on another 0.5%, it can meet all of China's needs for "green iron." If traditional high-carbon iron-making processes in China can be transferred to Australia and completed using renewable energy, global carbon emissions could be reduced by 4%.

The report said that this is exactly the original intention of Garnaut's proposal for Australia to become a "low-carbon superpower" ten years ago. Now, this vision is closer to reality than ever before.

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