Logistics, Ports & Terminals, Mining and Heavy Industries

Arrium buyer plans energy independence for Whyalla plant


The firm acquiring failed steel business Arrium for $700 million plans to increase production at the Whyalla steelworks, and burn excess gas to help make the plant energy self-sufficient, according to reports.

According to multiple sources, the people behind the joint bid from GFG Alliance and Liberty House, plan to increase production at the Whyalla plant from the present 1.1 million tonnes a year to as much as 1.5 million tonnes, and potentially export steel slab as far as Britain.

On top of that, the owners are also planning to invest in converting the plant back to a hematite iron ore process, reversing the previous owners’ decision to move to magnetite.

This move would be made to allow the company to export the hematite if the market is peaking.

The new owners also reportedly plan to utilise renewable energy, and burn unwanted gas generated during the steelmaking process, to help create a plant which generates enough energy to sustain itself – alleviating concerns over the rising cost of energy for industrial producers.

“We have a vision to create a vertically integrated and sustainable industrial business that encompasses mining, metal recycling, primary metal production, engineering and distribution,” GFG Alliance chairman Sanjeev Gupta said on July 4.

“We aim to leverage the advantages of integration across the value chain, from raw materials and metal production to high-end engineered products, coupled with supply chain and value added financial solutions.

“Looking forward, we will continue to explore opportunities to further grow our presence in Australia in adjacent and complementary industries, including renewable energy, metals and mining.”

GFG Alliance development director Michael Morley said the steelworks was well placed to play “a significant role” in the expected growth in infrastructure spending in Australia in coming years.

“The business is endowed with an experienced and skilled workforce, well-run operations, strong brands and long-established customer relationships and we look forward to exploring opportunities to grow the business further,” Morley said.

“Whilst the Whyalla Steelworks has faced well-publicised operational and financial challenges over recent years, we have developed a comprehensive plan to secure its long-term future and that of the local community.

“Our plan focuses on reducing the cost of iron ore feed, targeted modernisation investments, energy generation, expanding production and creating high value export opportunities.

“We are particularly excited by the opportunity for the Whyalla Steelworks to directly supply intermediate steel products to our UK rolling mills that are currently sourced from third parties.”

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