Blast furnace reline approved, billion-dollar Port Kembla project draws closer

The billion-dollar project has been approved as Critical State Significant Infrastructure, with the impact on jobs and the region's economy cited as the main factors.

Tuesday's approval does not guarantee the project will go ahead, as BlueScope forecasts the No.5 blast furnace won't reach the end of its life until some time between 2026 and 2020.

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"Project Ironman" as the reline is known within BlueScope, will still require a final investment decision from the steelmaker.

The Department of Planning and Environment's (DPE) assessment stated the reline project would generate a quarter of the region's economic output.

"The department's assessment concluded the project is critical for ensuring continued employment for 4,500 people and providing a total of 10,000 indirect jobs in the Illawarra region," it said.

"The project would make a significant economic contribution to the region and NSW, generating around $6.5 billion, or 24 per cent of regional economic output per year."

Submissions against the project were largely concerned with the production of greenhouse gases (GHG) from steelmaking, but the DPE assessment said new technology proposed would cause a 2.5 per cent reduction in GHG.

"The department's assessment concluded the GHG emissions from the project would be similar to the existing operations, with limited opportunity to further reduce emissions without a fundamental change in the way steel is produced on site," it said.

"The Department acknowledges the proponent is transitioning to low to zero emissions steelmaking over the long-term."

The No.6 blast furnace has lain dormant since 2011 when BlueScope cut steel production and cut thousands of jobs.

Relining a blast furnace involves replacing the refractory bricks which line the inside of the structure, which is where iron ore and coke are combined at extreme temperatures with other material to make iron for steelmaking.

This project would also include installing new systems and making repairs where required, plus emissions reduction technology which the steelmaker said would reduce energy consumption and emissions.

Earlier the NSW Environment Protection Authority had requested BlueScope provide additional information relating to contemporary pollution control standards. This additional information was included in BlueScope's updated assessment documents in July.

Comment was sought from BlueScope on Tuesday.