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Home > Geography > People & Economic Activity > Local Case Study > The Port Kembla Steelworks

The Port Kembla Steelworks

Stephen Goodley	Lynn Wood
Woonona High School	Warilla High School

Outcomes
History of steel and Port Kembla Steelworks
The nature of Port Kembla steelworks
Locational factors
Markets, marketing and competition
Technology, research and development: the future of steel
People and Port Kembla Steelworks
Environmental management at the steelworks
Government impact on the steelworks
Linkages and flows
Economic, environmental and social impacts of Port Kembla Steelworks steel
Environmental impacts of steel making at Port Kembla
The future of the Port Kembla steelworks
Revision exercises

This unit focuses on the steel industry and is divided into two sections. This second section is a case study of the Port Kembla steelworks as an example of an economic activity operating at the local scale. It reviews the location, nature and ecological dimensions of this particular steel plant. It also looks at linkages within the plant, its economic, social and environmental impacts and the plant’s future as a steel making operation.

The first section is a global overview of the steel industry. This should be reviewed first because it provides the context for this case study.

HSC outcomes for this unit

H1	explains the changing nature, spatial patterns and interaction of ecosystems, surban places and economic activity
H4	analyses the changing spatial and ecological dimensions of an economic activity
H5	evaluates environmental management strategies in terms of ecological sustainability
H6	evaluates the impacts of, and responses of people to, environmental change
H7	justifies geographical methods applicable and useful in the workplace and relevant to a changing world
H8	plans geographical inquiries to analyse and synthesise information from a variety of sources
H9	evaluates geographical information and sources for usefulness, validity and reliability
H10	applies maps, graphs and statistics, photographs and fieldwork to analyse and integrate data in geographical contexts
H11	applies mathematical ideas and techniques to analyse geographical data
H12	explains geographical patterns, processes and future trends through appropriate case studies and illustrative examples
H13	communicates complex geographical information, ideas and issues effectively, using appropriate written and/or oral, cartographic and graphic forms.

Corporate overview

See the Australia’s Industry World website:

History of steel and Port Kembla Steelworks

1848	First iron is produced in Australia at Mittagong, NSW
1899	BHP acquires iron ore leases at Iron Knob and Iron Monarch, SA
1900	Australia’s first steel is produced at Lithgow
1915	BHP opens the Newcastle iron and steelworks
1928	Iron and steel making begins at Port Kembla with the opening of Australian Iron and Steel (AIS) owned by the Hoskins family
1935	BHP acquires AIS, Port Kembla from the Hoskins family
1962	Basic oxygen steel making introduced at Newcastle
1970	BHP acquires a 50% shareholding in John Lysaught, Port Kembla
1978	Continuous slab caster commissioned at Port Kembla
1983	Federal government and BHP announce the start of the five year steel plan to improve the industry
1986	BHP commits $1.8 billion to upgrade the Port Kembla works as part of the steel plan
1996	No. 6 blast furnace, Port Kembla commissioned to replace blast furnaces Nos 2 and 4
1999	BHP closes its steel making operation at Newcastle
2000	OneSteel is created when BHP divests part of its Australia-wide steel making and processing operations.

For further information on the history of the Port Kembla steel works go to the Australia’s Industry World web site:

The Nature of the Port Kembla Steelworks

See the Australia’s Industry World website: and go to the section on “Steel Production: Processes and Products”.

Locational factors

The steelworks is located on the Pacific Ocean coast 60 km’s south of Sydney at Port Kembla that is 5 km’s south of central Wollongong. The plant surrounds Port Kembla Harbour and is located on 800 ha of flat land. It is one of the largest integrated steel making sites in the world, particularly in comparison to newer companies that operate from much smaller sites.

Manufacturing site location is based on a combination of factors which could include raw materials location, labour supply, flat land, a reliable source of energy and water, closeness to market, good transport, government decisions and technological change. Nearly all of these apply to the Port Kembla steelworks. G & C Hoskins Ltd operated a blast furnace and steelworks at Lithgow with the main competition being the BHP steelworks at Newcastle. In 1921, convinced that their steelworks needed to expand and have a coastal location to compete, Hoskins moved to Port Kembla (162 ha).

A large area of flat land with room to expand, an industrial workforce based in a growing city and good access to power and water all influenced the original decision by the Hoskins Bros. to locate at the Port Kembla site. The choice of Wollongong as a location, was influenced by a range of factors including:

1. Cheaper rail: Around this time, the NSW government abolished favourable freight charges on the Sydney to Lithgow line that meant it was no longer possible for Hoskins to supply the Sydney market at a competitive price. Port Kembla was closer (89 km to Sydney compared with Lithgow’s 153 km ) which meant lower transport costs to the Sydney market.
2. Coal and limestone: Hoskins Bros. recognised that good coking coal was a critical factor in steel making and it had previously bought a local mine. Coal is a bulky material and a location close to the steelworks represents a considerable saving in transport costs. Once at Port Kembla, the company quickly added to its coal leases. Limestone is another essential raw material and this was found at Marulan. Hoskins negotiated the construction of a rail link between Moss Vale (near Marulan) and Port Kembla to access this source of limestone.
3. Harbours: As Wollongong developed, improvements were made to the port facilities in the area, particularly to aid the transport of coal. Around the turn of the century, an artificial harbour and long breakwaters were added to protect the Port Kembla jetties. The availability of a deep water port attracted Hoskins Bros. to Port Kembla. Advantages included access for transporting raw materials, closeness to the Sydney market and good transport for interstate and overseas sales.
4. Other industries: Port Kembla harbour attracted other major industry to the area, mainly from Sydney. These included a Electrolytic Refining and Smelting Australia that established copper refining in 1908, followed by Metal Manufacturers Ltd in 1918 and Australian Fertilisers in 1921. This led to improved infrastructure (road, rail, power and water) that increased the attractiveness of the area.
5. BHP’s purchase of Hoskins Bros: In 1928, Hoskins started operations at Port Kembla with the opening of its newly formed company, Australian Iron and Steel (AIS). Soon the company was in financial trouble mainly because its steel was too expensive ($13 per tonne where British steel was $7 per tonne). In 1935, BHP purchased all of the shares in AIS to take control of the company. BHP then bought more land bringing the site up to 800 ha.

Markets, marketing and competition

The Port Kembla steelworks produces about 5 million tonnes of steel and exports 1.25 million tonnes of slabs per year. Major export markets are north Asia 48%, SE Asia 24% and the Americas 17%. Local markets cover all of Australia and relate to a number of different manufacturing industries. These include non-dwellings construction, e.g. warehouses, offices 20%, civil construction e.g. bridges, guardrails, pipelines 14%, domestic construction 20%, resource industries eg. farming 11%, consumer durables 4% and motor vehicles 16%. In some cases, Port Kembla Steelworks is a major shareholder in the downstream production.

PKS Steel is expanding its current markets by improving customer service and helping steel users to understand more about the product. Marketing seminars are conducted and brochures and videos have been produced. The steelworks has a call centre to take orders, market the product and advise potential customers on technical matters and how best to use the product. The use of electronic data interchange makes it quicker and cheaper for customers to receive and transmit business and product information.

To increase market share, PKS continues research to expand its product range and find new applications for its existing products. Inter-product competition comes in the form of substitutes, e.g. aluminium, glass, concrete, and PKS is dedicated to finding new markets for steel where previously these other materials have been used.

Smorgons Steel has recently become local competition for the Port Kembla steelworks and with the spin off of OneSteel, there is now effectively three major producers in the Australian steel industry. Competition from these two steel producers however is somewhat limited because they generally target different markets and different types of steel. Other competition comes in the form of imported steel that currently represents about 18% of the Australian steel market.

Technology, research and development: the future of steel

The Port Kembla steelworks operates a research and development program onsite at Port Kembla and through the Steel Institute at Wollongong University. Research concentrates on three main areas: improving the energy efficiency of plant and equipment, developing new products and improving the plant’s environmental performance. (See details elsewhere in these notes.)

Plant technology has been improved considerably since the 1980s. For example, continuous casting has replaced the production of ingots and new blast furnaces have been commissioned. Other parts of the plant are now quite old but they are still in good working order. One project that was developed at Port Kembla is a thin strip casting plant in which liquid steel is poured between two rollers to produce coils of sheet steel. This new process reduces energy consumption by removing the need for expensive hot rolling facilities and the associated reheating step. Such a process is yet to be introduced into production at Port Kembla but it is an obvious step for the future. Worldwide, electric arc furnace technology is becoming more the norm because it requires a smaller site and uses scrap as its major blast furnace input.

New products are continually being developed. These include special alloyed engineering steels, powder coated steel and high strength steel for construction of offshore platforms and pipelines. Characteristics of existing products are also being improved eg. thinner coatings which give better performance and improvements to the abrasion resistant finish of Colorbond steel. BHP Steel is also part of an international consortium that is designing the lightest possible steel car bodies. The aim is to reduce vehicle weight and create a more fuel efficient and environmentally friendly car.

People and Port Kembla Steelworks: management, employment and the investment in human capital

The character of employment at the steelworks has changed considerably. Traditionally, the steel industry involved hot, dirty and dangerous work. Today this is much less so yet the image remains and fewer people are now interested in this type of work. A large part of the workforce during the 1960s were post-WWII immigrants who often worked in manual employment due to poor language skills. Today, a significantly higher education standard is required to work in the industry and only a small number of labouring-type jobs involving few skills are available.

Steelworks employees are involved in setting targets for improving quality of products and productivity and they now play a major role in the development of the steelworks. Management is much more production-oriented and the management structure is flatter, i.e. fewer management levels between the top and bottom. Worker safety is of paramount concern and the steelworks is committed to a high standard of occupational health and safety. Previously, safety bonuses were used to help prevent injuries but this system was stopped because people were not reporting when an injury occurred. Today, the target is zero injuries and the attitude is that all injuries can be prevented.

The steelworks supports its workers through a range of programs, e.g. social clubs, help for families requiring extra funding (scholarships) and support for local community organisations. Employees have access to a share management plan to get cheaper shares so they can have a financial stake in the company. These strategies help to build a bond between employees and the company.

The steelworks invests heavily in its human resources. Training programs are now a major feature of the firm’s operations and the working environment encourages continuous learning. BHP supports this by partially funding the University of Wollongong Steel Institute that focuses on research into steel making, coated products and improving staff training. The steelworks offers cadetships, apprenticeships and vocational traineeships. Today, these are fewer in number but the financial commitment and quality of training is significantly better than in previous times.

Environmental management at the steelworks

1. Environmental performance:
   The Port Kembla steelworks has had an environmental policy since 1991 and its purpose is to identify, control and monitor environmental risks. Line managers are ultimately responsible for managing environmental issues with the support of environmental personnel who set standards, implement programs, monitor performance and provide advice. PKS has emergency response plans to deal with a broad range of crisis or situations, e.g. excessive pollution a blast furnace fire. An environmental incident is one that causes an adverse impact on the environment or it is a situation of non-compliance with environmental regulations or licence conditions. In the second half of 1997 for example, the Port Kembla steelworks had seven significant incidents mainly relating to gas emissions from the coke ovens.
2. Five-year pollution reduction programs:
   These plans have been developed in consultation with the Environmental Protection Authority (EPA) since 1976. Currently PKS is in the midst of its fourth five-year plan which involves a commitment of $300 million. The first five-year plan concentrated on reducing air and water pollution, e.g. improving water recycling systems in various parts of the plant and reducing coke oven emissions. The second five-year plan concentrated on controlling dust, e.g. automatic spraying of raw material stockpiles, truck washing stations, blast furnaces, dust extractors and landscaping to seal open areas. Currently, a $94 million program is underway to reduce sinter plant emissions.
3. By-products of the steel industry:
   The Port Kembla steelworks has created a significant by-products industry to reuse materials rather than adding them to the waste stream. Around 360 kg of by-products are produced per tonne of crude steel and at each phase, a conscious effort is made to reduce waste and use by-products efficiently. Major examples include:
   - coke oven gases: These are used for heating steel and electricity generation; other by-products include ammonium sulphate for fertilizer and BTX which is used in plastics and tar production
   - slag: This is processed into two forms. Rock slag is crushed for use in road base and aggregates. Granulated slag is a sand-like product that is used as a cement substitute where it is preferred for its durability, e.g. airport runways and the Sydney Harbour Tunnel
   - pickle liquor: This is used to clean steel after it has been rolled. In 1992, BHP converted from sulphuric to hydrochloric acid so that the used liquor could become a useful by-product. It is processed into a chemical that is used in sewage treatment and to reduce algal blooms in river systems
   - soil mix: The Port Kembla steelworks has been experimenting with an artificial soil based on dust and sewage sludge generated within the plant. Currently this mix is being used on gardens around the plant.
4. Recycling steel:
   Steel is the world’s most recycled product with scrap steel being a necessary component in the production of new steel. About 65% of steel is recycled with the main sources being vehicles, consumer durables, building and heavy machinery and home steel , i.e. scrap generated in steel production and close downstream manufacturing. Scrap steel makes up 15–20% of the material that goes into the basic oxygen steel making furnaces.

Government impact on the steelworks

1. Protection:
   The Australian government used to support the steel industry by applying tariffs on imported steel but this is no longer the case. It has forced the steelworks to become more competitive with the overseas product by spending millions of dollars to upgrade equipment and introduce new techniques. Steel is a bulky item and Australia’s distance from global markets means transport costs have served to create a significant barrier to overseas competition. On the other hand, many countries protect their steel industry. For example, during the 1980s, the USA stopped all steel imports and to overcome this, BHP opened its own steel plants on the west coast of USA.
   
   
2. Infrastructure:
   The government is responsible for providing external infrastructure, i.e. road, rail and port facilities, plus basic services, i.e. water, electricity, telecommunications and emergency support. Without these, the steelworks could not operate.
   
   
3. Occupational Health and Safety legislation:
   Steelworkers have a strong commitment to safety and as with all industries, the Port Kembla steelworks is subject to stringent safety regulations. WorkCover NSW reviews all work practices regularly and holds investigations into major accidents or when workers are concerned and make a complaint. This is in everyone’s best interest and generally the Port Kembla steelworks, the government and unions work cooperatively.
   
   
4. Environmental control:
   The Port Kembla steelworks has to negotiate a contract with the Environmental Protection Authority (EPA) that sets standards and develops programs to deal with issues. This contract includes a pollution licensing fee and a bond agreement involving financial penalties if environmental controls are not completed by an agreed date. In general, the Port Kembla steelworks is a self-regulator, this means it is responsible for its own environmental management and associated testing of water, air and noise pollution. In some cases, the Port Kembla steelworks contracts private providers to test the environment, e.g. Monash University does a bi-annual check of water quality in Allans Creek. Unions and concerned citizens can also highlight issues where they feel the Port Kembla steelworks is affecting the environment. The Environmental Protection Authority (EPA) will then investigate and where a breach is found, very heavy fines can be imposed.
   
   
5. Government interaction:
   The Port Kembla steelworks is part of a large multinational corporation and is a profit-making venture with a large workforce. This gives it economic and political power so that the concerns of PKS are well understood by politicians.
   

Linkages and flows of people, goods, services and ideas within the Port Kembla steelworks

The large size of the plant site has required the development of significant linkages and flows. Today, these linkages are very mechanised and with capital-intensive technology replacing people, there are less people and reduced movements across the plant. The net effect of improved systems is to ensure that the steelworks functions more effectively.

1. Rail: The Wollongong–South Coast railway line runs through the steelworks; it includes three railway stations that provide a rail link for inputs and outputs. Within the works, there is over 100 km of railway track that is used extensively to transport molten iron in torpedo ladles to the BOS plant and to move bulky raw materials and finished products, e.g. steel slabs around the site.
   Road: The Port Kembla steelworks has its own road system connected via three major sets of lights to the local suburban expressway. There are over 50 km of roads on site that are used by specialised heavy machinery, e.g. forklifts, dumpsters to move materials, equipment etc., around the site and by staff getting to work and moving around the plant. The road system is also vital for bringing manufacturing supplies to the site and for the transport of finished products.
   Conveyer belts: These move raw materials from port side storage to the blast furnace and in the rolling mills, they move steel from point to point as its shape is changed.
   
2. Good communications are essential for the plant to operate efficiently. Traditionally, the different sections of the plant worked independently. Each section had a separate management structure and each operated like a business within a business. A number of factors have contributed to a major shift in the organisation, particularly in communication and management. Telecommunications (email, Internet, use of computer software) have greatly improved the flow of information around the plant. The use of telephones to replace the PA and radio headset system has also greatly increased the speed of information flows. A good example is the use of computer touch screens and mobile phones to transfer production information and confirm steel blends. This system replaces long paper-based computer printouts.
   
3. Management systems
   Speed and efficiency in movement of decisions and ideas has been greatly improved by a flattening and rationalisation of management. There are now fewer managers and each has broader responsibilities with the support of an under-manager team. This allows for much greater co-ordination across the plant and a linking of the production sections. With fewer staff, the transfer of ideas and response to issues between management and workers is much more efficient. The Port Kembla steelworks has also introduced a planning department and a human resources department with part of their responsibilities being to coordinate staff training and the development of ideas.
4. Traditionally quality control was done at the end point by checking the finished product. Errors were reprocessed and while this is still the case today, quality control has become a major linkage by checking at every step in the production process. This has greatly reduced production defects, made production more efficient and improved product quality.
   

Economic, environmental and social impacts of Port Kembla Steelworks

In steel, like all manufacturing, the use of new technology in production invariably means machines and automation replacing workers. The result is an increase in productivity (how much and how quickly a product is made) and a decline in manufacturing employment. The data for the Port Kembla steelworks clearly shows a trend towards increased manufacturing productivity and falling employment. Production has risen slightly from 4 356 000 tonnes in 1980 to 4 940 000 tonnes in 2000. At the same time, employment has decreased significantly i.e. from 20 299 in 1980 to 5 900 in 2000.

These trends have resulted in a range of significant economic and social impacts on the local economy, steelworkers and the Wollongong community.

1. Plant redevelopment:
   Technology drives change and when a plant becomes old and unproductive it has to be either rebuilt or closed, e.g. blast furnaces Nos. 1 to 4 no longer exist. This reduces employment. On the other hand, using new technology means new plant has to be opened which counterbalances job losses associated with closure. Examples at Port Kembla are the construction of blast furnaces Nos. 5 and 6 and the proposed Duke Energy cogeneration project. <
2. Restructuring of employment:
   Over the last 40 years in Australia, there has been a marked trend towards falling manufacturing employment and increased employment in the tertiary sector. Job losses at Port Kembla, particularly in the early 1980s, initially led to a decline in economic conditions and a dislocation of people as steelworkers moved away to find employment elsewhere. Over the period since, the Wollongong economy has diversified significantly so that it is now much less reliant on steel. While steel is still a major employer, other sectors such as tourism, education, business, finance and communication services and wholesale and retail trade have all become much larger employers.
3. Outsourcing:
   There is a global trend towards outsourcing in both government and industry. This is where large corporations contract out non-core parts of their business. The idea is that a firm specialising in a particular aspect of a business can provide a particular service better and more cheaply than if the company takes on this role itself. Port Kembla steel has outsourced large sections of its operations including transport, scrap steel, processing slag, maintenance and plant fabrication. The result is that while direct employment at the steel works has fallen, employment in associated firms who provide the outsourced product has increased.
4. Skilled labour:
   Traditionally the steel industry involves hard, hot, dirty work based around manual and unskilled labourer-type tasks. Today, steel is a high tech industry and the traditional steel worker ethos no longer exists. Workers now have to be highly skilled and well trained to function effectively. Some older steel workers have been left behind and while there are still some jobs for them most have been retrained and helped to do their job better. This extends to skilled areas such as engineering where a much higher level of training is now required.
5. Quality control:
   This is an excellent example of changing job expectations. Traditionally, quality control depended on people checking the steel product at the end of the process to ensure it was up to standard. Today, quality control is built into all phases of production by ensuring a predetermined standard is met at each step in the process. Where traditionally the checking work was boring and generally mindless, the need to ensure a standard means the work is now much more challenging and meaningful.

Three other impacts that have an economic and social dimension are:

1. Community diversity:
   Steel has made a major contribution to the multicultural nature of the local society. Expansion in steel making at Port Kembla during the 1950s and early 1960s coincided with the period of post war immigration and so Wollongong is where many migrants chose to live and work. These people have stayed and had families. Over this period and up to the late 1980s, the steelworks also had large scale cadetship and apprenticeship training schemes in place. This drew people from around the state to live and work in Wollongong. Today, the steelworks’ smaller employment base means fewer cadetships are offered each year and virtually all new employment is drawn from the existing pool of local residents.
2. Community support: the steel industry contributes both directly and indirectly to the local community in a number of ways:
   • employees in steel and associated industries live, work and spend in the local area; their spending power has a major impact on the local economy
   • the presence of the steel industry greatly influenced the provision and consequent expansion of higher education (both university and TAFE) in the local area. Today PKS retains major links via membership on the various boards managing higher education, offering scholarships and through support of the Steel Institute, a research and development arm of the University of Wollongong
   • PKS sponsors a wide range of community activities including sporting teams, surf lifesaving, theatre and music.
3. Using steel:
   Research and development is a key part of the steel works operations. The Port Kembla steelworks has a number of projects which seek to improve existing steel products, develop new products and find new ways to use steel. The Port Kembla steelworks continues research to improve coated steel products and expand the use of steel frames in house building (they are cheaper, last longer and can be recycled). The Port Kembla steelworks was a major sponsor of the Olympics. It provided materials and helped design venues and in the process, used the Olympics to showcase new ways to use and feature steel in construction.
   

Environmental impacts of steel making at Port Kembla

Today, BHP is still one of the largest private sector polluters in NSW, but over the last 25 years, the company has been responsible for a range of initiatives that have significantly improved its environmental record.

1. Air quality:
   Major pollution control efforts are directed towards reducing air pollution caused by the emission of dust, fumes and unburnt gases during the steel making process. Dust control has improved through the use of sprays on all stockpiles, greening the steelworks to cover unsealed areas, road improvements to aid dust collection, a truck washing system and covering loads. As blast furnaces are refitted, new pollution control equipment is being added. Dedusting equipment collects the brown fumes and dust for cleaning and the use of slag recycling machinery has the added benefit of reducing sulphurous odours associated with steel production. New technology and work methods have been used to reduce coke oven emissions, e.g. better door seals and a plant to collect and filter all coke oven gases.
2. Water quality:
   The steelworks is the largest water user in the Illawarra. Over one billion litres of water passes through the plant each day, with only 4% being fresh water and the rest is made up of recycled water and seawater. The Port Kembla steelworks has developed systems to recycle water at a number of points around the plant. Recycled water has the dual effect of reducing pressure on both the fresh water supply and the local sewage treatment plant at Wollongong. Recent developments include:
   • treated effluent is being used in slag processing and blast furnace dust control
   • recycled water from the Springhill plant is used in the by-products processing area
   • a world’s best biological effluent plant was constructed at the steelworks in 1991 to treat waste water.
   A number of other steps have been taken to improve water quality:
   
   • a recycling system has been developed to capture the blue electro-chemical fluid used in tinplate manufacturing; this has stopped discolouration of the harbour
   • settling ponds have been introduced to remove solids from the water used in the blast furnaces
   • a large kerbing and drainage program has been implemented to control stormwater run off.
   The overall effect has been to make the harbour and local creeks much cleaner and environmentally friendly. A 1991 study showed a significant increase in marine life in the harbour and creeks. It also showed the warmer environment associated with higher water discharge temperatures, was modifying rather than destroying the local marine ecology.
3. Noise pollution:
   Noise is an issue for workers at the plant and residents in nearby suburbs and a number of step have been taken to reduce noise pollution around the steelworks:
   
   • rubber coated rollers to reduce the noise of steel plates banging against each roller in the plate mill
   • rail operations have been made quieter through track improvements, use of noise suppressors on locomotives and construction of concrete sound barriers
   • installation of silencers on each of the basic oxygen steel making stacks
   • use of surveys and monitoring to identify specific loud noises and find ways to stop that noise, e.g. improving crane cabins, designing new door systems.
4. Energy conservation:
   Energy is essential to make steel with approximately 90% coming from coal and the rest coming from natural gas and electricity. Coal is converted to coke for use in the blast furnace and the gases produced in steel making are used in the plant’s own electricity generation facilities. The recycling of these gases reduces greenhouse emissions and provides 25% of the plant’s electricity requirements. It has been estimated the energy saving initiatives have reduced energy needs in steel making by 30% since the 1970s. Major contributors have been the shift from open hearth to basic oxygen steel making and from ingot production to direct slab casting. A major current initiative is the Duke Energy cogeneration project that will use blast furnace, coke ovens and basic oxygen steel making gases to generate electricity. This will increase electricity production from the steelworks by 400% and at the same time, it will significantly reduce greenhouse emissions.
5. Protection of flora and fauna at the Port Kembla site:
   Management of local flora and fauna around the steelworks site is an ongoing part of the environmental management system. A site audit in 1996 for example, found a colony of rare green and golden bell frogs living in a partially flooded, disused railway cutting. This colony is now subject to ongoing monitoring through a joint project with Southern Cross University. A recent census showed that 39 species of bird live at or frequently visit the site. Wading birds, ducks and moorhens are the most common species. Since 1987, the Port Kembla steelworks has implemented a major greening program so that by 1998, 441 000 trees, shrubs and ground cover had been established in over 180 individual gardens around the site.

The future of the Port Kembla steelworks

At present, the future of steel production at Port Kembla is very uncertain. The major issue is the change in corporate direction by BHP towards a focus on mining and its commitment to sell the Port Kembla steelworks. The decision by BHP to get out of steel is driven by the lower investment returns that are delivered by steel. This is a global problem that is due to:

• excess productive capacity due to the large number of firms producing steel worldwide
• the development of new technology leading to new, more efficient plants and lower production costs. The high cost of introducing new technology into an older plant means it is often better to shut the older plant rather than rebuilding it.

Currently, the Port Kembla steelworks is a very efficient plant and the expectation is that it will be sold and continue operation under the direction of new owners. In the end, this will be decided by the plant’s ability to deliver a good return to shareholders and in turn, this depends on decisions that are made to ensure low cost production and delivery to a market where there is strong demand for the steel produced at Port Kembla. The key to that future is the development and introduction of new technologies in relation to three main areas:

1. Productive capacity:
   It is essential that the drive to low cost, high quality production continues. In the longer term this will mean the development of new plant and equipment, e.g. elimination of the hot strip mill to be replaced by continuous strip casting.
2. Market for steel:
   Without customers there is no reason to produce steel. Marketing must ensure that customers are given good service and that they are aware of the product range and the uses of steel. New products and uses must be developed to expand the product range and deal with competition from alternatives, e.g. glass, aluminium.
3. Environment:
   It is very expensive to produce steel and stay within acceptable environmental limits. Moreover, as our understanding of the environment improves, what is acceptable changes, and the cost continues to rise. Environmental compliance represents a significant extra cost to the business, yet to stay in production, the steelworks has to meet the high cost of compliance while still remaining a low cost producer. An example of how to address this issue is the Duke Energy project that involves the conversion of a by-product that created pollution into a cost saving, power generation system.

Clearly, an essential part of the future is the need for the steelworks to maintain a strong research and development program to address these issues. Along with this is the need to maintain community support by focusing on environment, workplace safety and issues relating to new technology and associated workforce reductions.

Revision exercises

Some of these questions refer to other websites, some can be answered from the material presented above and some require an answer from your own knowledge. \

PKS: go to the Australia’s Industry World website:

Write a short description to explain the ownership and control of the Port Kembla Steelworks. (H12)

History of steel: go to the Australia’s Industry World website:

Draw a timeline of significant events relating specifically to the Port Kembla Steelworks. (H8, H12, H13)
Site and Location

Use an atlas to:

draw a sketch map of NSW and locate Port Kembla (also show Sydney on the map)

write one paragraph to describe the location of the Port Kembla Steelworks (hint: include latitude, longitude, cities, distances, etc.)

list and briefly explain each of the locational factors which influenced the decision to locate at the Port Kembla site. (H8, H12, H13)

Steel production: go to the Australia’s Industry World website:

describe the steel making process (include quantities)

list and describe the main products made by the Port Kembla Steelworks. (H8)

Markets

list the major export markets for Port Kembla steel

how is the Port Kembla Steelworks using marketing to sell more steel? (H4)

Technology

What are the future directions for steel making at Port Kembla? (H4)

People and Port Kembla Steelworks

Refer to Appendix One (the graph of employment and production for Port Kembla at the end of this section).

calculate the percentage increase in steel production from 1980 to 2000

calculate the percentage decrease in employment from 1980 to 2000

the character of the employment at the Port Kembla Steelworks has changed considerably in recent years. Briefly compare and contrast how the nature of work has changed between the 1950s and today. (H1, H6, H11)

Environmental management

Describe the four (4) main directions that environmental management have taken in recent years. (H5, H6)

Government impacts

When reviewing global steel production you investigated government protection. How else has the government had an impact on the Port Kembla Steelworks? (H10, H12, H13)

Linkages and flows of people, ideas, goods and services within the Port Kembla Steelworks

Refer to the site map: “Layout of the Steelworks” in the Australia’s Industry World website.

draw an outline map of the site with the following locations marked:
- a North arrow, an arrow and label indicating the direction to Shellharbour and Wollongong
- Tasman Sea, outer harbour, inner harbour
- coal terminal, iron making, steel making, rolling mills, coated products, packaging products

describe how goods are moved around the plant

explain the role of technology in communication and management across the plant.

The future

explain why the future of the Port Kembla Steelworks is uncertain.

future developments and directions will undoubtedly be related to new technologies. What are the focus areas of these new technologies?

Discuss the economic, environmental and social impacts of the Port Kembla Steelworks.

List and briefly explain five (5) possible geographical research methods that you could use when undertaking fieldwork at the Port Kembla Steelworks. (H8)

Appendix one : Employment and production Port Kembla steelworks, 1980 to 2000.