UPDATE: Pollies in push for QAL red mud dam plan
THERE'S some scepticism around the latest proposal from the group behind the Gladstone Steel Project, but behind the scenes the State Government is working to make it a reality.
A formal proposal pitching the idea of extracting iron ore from red mud created by the alumina industry is already sitting on state infrastructure minister Anthony Lynham's desk.
This week the state MPs will be in Brisbane for parliament and Gladstone MP Glenn Butcher says he will be pushing for the state government to hurry the project along.
"I'll be advocating for the government to do what it can to speed this process up," Mr Butcher said.
Building a pilot plant, to be used to extract iron ore from the red mud produced by the alumina industry, is expected to create hundreds of jobs and kick start the steel industry in Gladstone.
The Gladstone Steel Project is in discussions with the state government to secure about $200,000 in seed funding for further testing, although an application is yet to be lodged.
The Observer has contacted Minister Lynham's office.
RED mud could be the key to creating a new industry in Gladstone that would lead to thousands of new jobs.
Extracting iron ore from the waste product of aluminium to make steel is the latest idea from the group behind the long awaited Gladstone Steel Project.
But the proposal depends on whether Rio Tinto, owners of Gladstone aluminium producers, agrees to be the guinea pig for ground-breaking technology developed in Germany.
So far the directors of Gladstone Steel are yet to approach Queensland Alumina Limited.
But QAL's community relations manager Jeremy Hastings says the company is willing to explore the possibilities.
The red mud represents a significant environmental burden for the aluminium industry; and Mr Hastings said he "would welcome the opportunity to understand (Gladstone Steel's) plans to address environmental, economic and regulatory matters."
Using the volume of red mud already being produced in Gladstone, the iron ore extracted could produce 2 million tonnes of steel a year.
It's a far cry from the original proposal, from the now defunct Boulder Steel, which would have cost $6 billion and produced 5 million tonnes of steel a year.
But it's the first step towards getting the project off the ground according to Gladstone Steel Director Paul Sundstrom who is convinced the project is worth pursuing.
He's already approached the State Government to secure $200,000 in seed funding for testing and the design of a pilot plant.
Gladstone MP Glenn Butcher said the new direction had the support of the state government, although he too pointed out having Rio Tinto on board was crucial to its success.
For years Gladstone has been waiting on Malaysian investors to front up the cash for the Gladstone Steel Project, lead by Ross Johnson who has since been sacked and replaced by Dean Adams, from DEJA International.
Now, there is significant interest in the project, Mr Sundstrom said.
"Dean has an excellent track record for delivering these types of projects and is well known by industry figures and governments representatives across the world," Mr Sundstrom said.
The viability of the new red mud processing plant is still subject to testing in Germany where the technology was developed, but those on the ground are confident Gladstone investors will see some tangible progress soon.