Posted on 01 Aug 2025
Metal recycler Sims has entered into a non-binding memorandum of understanding (MOU) with Equest Steel (trading as Alter Steel), to establish a scrap supply and services agreement supporting Alter’s proposed electric arc furnace (EAF) in Australia, Kallanish notes.
Sims says in a bourse filing that the EAF is planned to be located approximately 1km from the firm’s site in Pinkenba, Queensland in 2028. Under the terms of the MOU, it is proposed that Sims would exclusively supply up to 550,000 tonnes/year of ferrous scrap, manage Alter Steel’s scrap inventory on a just in time basis, and provide access to port and rail infrastructure via the staged development of Sims’ Pinkenba site.
The parties will use the MOU as the framework for negotiating a binding agreement.
The MOU represents a significant milestone for Sims toward advancing the decarbonisation of steelmaking in Australia and New Zealand (ANZ), as Alter positions itself to be the leader in the growing green steel sector. It also reflects the broader market shift towards onshoring steel production, supported by targeted government policy.
The MOU follows a supply agreement signed in August 2024 between Sims and New Zealand Steel, a wholly owned BlueScope Steel subsidiary, to support the Glenbrook EAF in New Zealand. Under that agreement, the initial term is five years, with a further five-year extension option, covering the supply of at least 200,000t/y of scrap. Operations are expected to begin in early 2026.
Currently, around 50% of its ANZ metal scrap volumes are exported. Supplying 550,000t to Alter and a minimum of 200,000t to New Zealand Steel will materially shift that balance by directing a greater share of volume towards domestic optionality, enhancing operational efficiency and market resilience.
Sims’ Pinkenba site is expected to be developed progressively over the next decade, with a total investment estimated at approximately AUD 215 million ($139m). An initial allocation of AUD 40m has been approved by the Board for FY26 and FY27.
"The MOU provides a potential pathway to long-term volume certainty for both parties, supported by efficient logistics through the Pinkenba hub. It also builds on our core strengths of providing responsible sustainable operations, scale, material quality, technology, and diverse scrap sourcing, supported by a network of collection sites with access to a wide range of transport options," says Stephen Mikkelsen, chief executive officer and managing director of Sims.
Source:Kallanish
