CASE STUDY IGF Guidance For Governments: Leveraging Local Content Decisions for Sustainable Development

The document analyzes the rise and fall of Australia's domestic steel industry, which was initially built through protective tariffs, bounties, and an iron ore export ban from 1938 to 1960. While these measures successfully met domestic demand for over 80 years, the industry struggled with low productivity and failed to become globally competitive once protections were lifted. Later attempts by the Western Australian government in 1996 to mandate downstream beneficiation through legislative acts led to expensive projects by BHP and Rio Tinto that never reached economic viability and were eventually written off. The case study concludes that while government intervention can establish downstream industries, long-term success requires a sophisticated industrial policy based on comparative advantages and market capabilities rather than prescriptive requirements.

• Australia successfully established a domestic steel industry that met domestic demand for over 80 years using government interventions, including steel import restrictions, bounties, and an export ban on iron ore that lasted from 1938 to 1960.
• Despite initial success, the Australian steel industry lacked global competitiveness due to low productivity resulting from long-term protectionism, and it eventually declined following the 2008 financial crisis, a high Australian dollar, and the removal of protective barriers in 2011.
• Legislative efforts by the State of Western Australia in 1996 to force downstream beneficiation—specifically through the Iron Ore Beneficiation Agreement Act and The Iron Ore Direct Reduced Iron Agreement Act—resulted in failed investments by BHP and Rio Tinto that were not economically viable.
• The case study identifies key lessons for industrial policy: while intervention can build downstream industries, protectionism must eventually be lifted to ensure competitiveness, and policies must be grounded in sound comparative advantages to avoid economically senseless requirements.

APA

Maennling, N., & Toledano, P. (2018). CASE STUDY IGF Guidance For Governments: Leveraging Local Content Decisions for Sustainable Development. International Institute for Sustainable Development. https://www.iisd.org/sites/default/files/publications/case-study-australia-downstream-linkages.pdf

Chicago

Maennling, Nicolas, and Perrine Toledano. CASE STUDY IGF Guidance For Governments: Leveraging Local Content Decisions for Sustainable Development. International Institute for Sustainable Development, 2018. https://www.iisd.org/sites/default/files/publications/case-study-australia-downstream-linkages.pdf.

Wikipedia

{{cite report |last1=Maennling |first1=Nicolas |last2=Toledano |first2=Perrine |title=CASE STUDY IGF Guidance For Governments: Leveraging Local Content Decisions for Sustainable Development |publisher=International Institute for Sustainable Development |date=2018 |url=https://www.iisd.org/sites/default/files/publications/case-study-australia-downstream-linkages.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{maennling2018case, author = {Maennling, Nicolas and Toledano, Perrine}, title = {{CASE STUDY IGF Guidance For Governments: Leveraging Local Content Decisions for Sustainable Development}}, institution = {International Institute for Sustainable Development}, year = {2018}, url = {https://www.iisd.org/sites/default/files/publications/case-study-australia-downstream-linkages.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }