The pair entered into a memorandum of understanding (MoU) yesterday, citing the global steel decarbonisation trend, with the council hoping the area will become a “green iron” hub.

The council said Port Pirie was a “natural fit for downstream processing of the abundant magnetite resources of the Braemar iron province”, which is near Magnetite’s Razorback Iron Ore project.

The MoU provides a framework under which ASX-listed Magnetite and the council can engage the state and federal government on the development potential for green iron production in Port Pirie.

Port Pirie Mayor Leon Stephens said the partnership would unlock a “significant opportunity to become more involved in green iron/steel production”.

“Port Pirie Regional Council has been exploring options to build upon our industrial strengths to attract alternative industry in order to diversify our local economy,” he said.

“We recognise that there are many renewable energy opportunities in the Upper Spencer Gulf Region and throughout South Australia and we are excited for the social, economic and environmental benefits our involvement will bring to our community.”

Magnetite Mines CEO Tim Dobson said he was “excited to be collaborating with the Port Pirie Regional Council”.

“We see a once-in-a-generation, economy-changing opportunity for South Australia to take a leading role in global steel sector decarbonisation thanks to its expansive magnetite resources, green hydrogen and renewable energy,” he said.

“All major international steelmakers are committed to reducing their carbon footprints, and need green iron to achieve that.

“It is clear to me that Port Pirie is robust and logical location for South Australia’s second iron hub – processing and exporting Braemer iron ores for decades into the future.”

The news follows the South Australian Mining Minister Tom Koutsantonis telling InDaily the state was well-positioned to play a role in a steel decarbonisation trial being led by BHP, Rio Tinto and Bluescope.

The three companies entered into an agreement last week to investigate the development of Australia’s first ironmaking electric smelting furnace pilot plant, which would aim to demonstrate that the production of molten iron from Pilbara ores is possible when using renewable energy.

Koutsantonis said SA was an “ideal location for such a trial”.

“We have a unique combination of natural resources, renewable energy and a skilled workforce – as well as the geographical space necessary to accommodate such a pilot plant at scale,” he said.

“We are interested to hear more from Rio Tinto, BHP and BlueScope about whether this might be an opportunity for SA and we would obviously work with all three to assist.”

It also comes after a $22 million vanadium flow battery and co-located solar farm was switched on at Port Pirie in June last year.

The farm – built by Yadlamalka Energy – is capable of producing approximately 10 GWh of dispatchable power per year and was developed over the prior three years with the backing of the Australian Renewable Energy Agency (AREA).

“There’s been a number of solar farms either in development or have been developed or planned, along with wind – a lot of wind up in that direction as well,” Yadlamalka founder and chairman Andrew Doman told InDaily at the time.

“There’s a corridor from Port Pirie up to Port Augusta. It’s also close to the central hub of the grid so it’s a good location from that point of view.”