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Whyalla Mayor Lyn Breuer has welcomed the Gupta Family Group Alliance’s plans for the Whyalla steelworks after an announcement from the company today.
Mayor Breuer said the plans announced on Friday, December 22, would not only transform GFG’s Whyalla operations, but also the entire community.
"We are incredibly excited to hear of the progress made by the GFG Alliance during their 100‐day review," Mayor Breuer said.
"The proposed transformation of the steelworks – together with the development of the mining business ‐ underpins the future for the Whyalla community.
"GFG Alliance’s vision for the region has the full support of the community and we continue to give them – and the South Australian and Federal Governments – our complete support."
The GFG Alliance today announced the final concept plan for the transformation (the "Transformation") of the Whyalla operations in a statement.
GFG Alliance said it follows significant and detailed work undertaken following the successful acquisition of the former Arrium Australia businesses on September 1 this year.
In its statement, GFG Alliance said the Transformation was expected to structurally improve the operational and financial performance of the Whyalla Steelworks thereby securing its long‐term sustainability, and includes a number of initiatives across the Mining operations.
The Transformation investments include:
Reduction of ferrous feed costs for the Steelworks through investments in feed preconditioning, utilising latest technology;
Improvements in energy efficiency at the Steelworks through investments in co‐generation and the capture of process off‐gases;
Targeted modernisation and capacity upgrade investments across the steelworks and the rolling mill utilising latest technology; and
Investments to increase production at the steelworks by approximately 50% to 1.5 million tonnes per annum, also widening the product offering of the Steelworks and opening up high margin domestic and export markets including the global operations of the GFG Alliance.
The Transformation is expected to significantly reduce the unit cost of steel production, ensuring the steelworks can be competitive throughout the economic cycle. GFG estimated that the capital cost of the Transformation to be approximately A$1 billion. It is expected that this will be financed through a combination of funding sources, including GFG Alliance.
GFG Alliance said the Transformation will also require support from the South Australian and Federal governments. Any Government support will be conditional on both the South Australian and Federal Governments being satisfied that the Transformation will underpin the long‐term sustainable future of the operations.
Other investments are also targeted for the Mining operations, including investments to increase iron ore reserves and looking to further unlock large scale magnetite potential.
The GFG Alliance said it also intends to explore development of the Whyalla Port towards a world scale multi‐user facility to support not only the steelworks and mining operations but further economic development across the Spencer Gulf.
The GFG Alliance will now proceed with feasibility studies which will continue through 2018. The cost of these studies will be partly funded from drawing on the previously announced A$50m South Australian Government grant.
"We have developed a comprehensive investment concept plan for the Whyalla Steelworks and Mining businesses that will deliver a step‐change in operational and financial performance, ensuring the long‐term sustainability of both the operations and the local community." GFG Alliance Executive Chairman Sanjeev Gupta said.
"We are working productively with both governments and look forward to discussions continuing in the interests of all parties involved as we progress with our further studies."
Looking further out, Mr Gupta said, "we strongly believe that the transformation will also provide a solid basis for our broader vision of making Whyalla a centre of manufacturing excellence.
"Through large investments in renewable energy and key infrastructure projects, we believe we can make Whyalla an attractive global hub for innovative, energy‐intensive industry."