Whyalla reborn: Plans unveiled for giant new steel mill, four-star hotel, horticulture project and recycling business
Sanjeev Gupta has revealed an audacious bid to build one of the biggest steelworks in the world in Whyalla, as well as a business-class hotel and solar-powered horticulture project.
SA Business
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- ANALYSIS: He’s Whyalla’s white knight, but we nearly missed out
- BIG REVEAL: How political and business leaders are reacting
- OFF THE RECORD: Whyalla waits for its new awakening
- Sanjeev Gupta’s Whyalla plans are reinvigorating the steel city
- He has huge plans for renewable energy in SA
- And also plans two new iron ore mines
British steel magnate Sanjeev Gupta has announced an audacious bid to build one of the biggest steelworks in the world in Whyalla, which would aim to pump billions of dollars into the state’s economy and quadruple the city’s population.
The plan to build a “next-gen, mega-steel plant”, which is still subject to a six to 12-month feasibility plan, was backed by the signing of $600 million in contracts to upgrade the current steelworks, and three major projects to diversify the steel city’s economy.
These were a $145 million intensive horticulture project, powered by solar energy and backed by Chinese investors; a new $45 million hotel on the foreshore to be built by the Pelligra Group, owners of the Holden site in Elizabeth; and, a $6 million green organics recycling plant to be built by Peats Soil and Garden Supplies.
The projects aim to boost Whyalla’s population from about 20,000 to about 80,000, which would make it easily South Australia’s biggest regional city.
If it comes to fruition, the new steel plant would take three years to build, and produce 10 million tonnes of steel per year.
Costings were not announced but would likely run into the billions.
For contrast, the current steelworks has a 1.2 million tonne capacity, which is being upgraded to 1.8 million.
Mr Gupta, whose company GFG Alliance bought the failed Arrium businesses, including the Whyalla steelworks, out of administration late last year, said it angered him that people thought Whyalla was a “broken steel town” when he arrived.
Mr Gutpa said this was like a “red rag to a bull” for him, and he was “used to looking for diamonds in the rough”.
“And here we truly did find a diamond. I found a diamond which was, in many ways to me, obvious,” he said.
“We have a place which has all the natural resources required to make steel, we have the best natural resources for renewable energy, we have great infrastructure including a unique port, and most of all, we have a workforce who was willing to fight for destiny itself. So why, why is it not viable, was my question, and I set about my journey which brings us to today.’’
Mr Gupta said CISDI Engineering, a subsidiary of the China Metallurgical Group Corporation, would do a six- to 12-month study on building the new plant.
“Using the most advanced technologies and our own local resources, we will aim to be one of the most competitive steel producers globally,” Mr Gupta said.
“Thousands of job opportunities will be created throughout the construction phase and from the plant’s ongoing operations.
“This will see a new generation of steel‐makers proudly competing on the world stage, and reflects our desire to transform Whyalla into both an Australian and global powerhouse of industry for generations to come.
“‘Liberty Next Gen Steel’ will be the largest in the Western world, capable of producing 10 million tonnes per year, with the ability and infrastructure to double capacity in time.”
The $600 million in upgrades to the current steelworks, also announced Monday, included contracts being signed for a state-of-the-art rail and structural heavy section mill, and for CISDI to build a pulverised coal injection plant.
The new plant would be built by MCC for Mr Gupta’s company GFG Alliance, which owns the steelworks and associated iron ore mines.
Mr Gupta said these projects would take three years to be designed and constructed and would likely require government funding of some sort.
“It’s fantastic that both Federal and State governments and opposition are here with us today to celebrate this momentous occasion – this great industrial endeavour has universal and bipartisan support,” Mr Gupta said.
“Naturally, all stakeholders will need to be confident that the transformation will underpin the long- term, sustainable future of the operations.
“This is the very objective of the program, so I am confident it will win widespread support.”
Mr Gupta said GFG Alliance had already invested almost $40 million in feasibility studies and was well progressed in other areas of the transformation, including new steelmaking equipment and on-site power generation.
Mr Gupta’s announcement builds on his $US1 billion, 1 gigawatt energy plan, under which 780,000 solar panels will be installed at Cultana, just outside Whyalla.
That project is expected to start construction soon, and will be integrated into plans to store energy in pumped hydro operations at disused iron ore mines near the town.
GFG is also planning to build the world’s largest lithium ion battery to store renewable energy.
Mr Gupta eventually aims to install 10GW of power nationally, which is about five times SA’s usual daily usage.
The other projects, which were announced by Mayor Clare McLaughlin, would diversify the economy and create sustainable jobs, she said.
The new projects were:
A SOLAR HORTICULTURAL FACILITY: A $145m intensive horticulture facility powered by solar energy. It would be built on a large parcel of land in the Whyalla Industrial Estate. Chinese company BECE would fund and build this project.
A FORESHORE HOTEL: A $45m, 150-room hotel with conference and pool facilities. The hotel will have 3.5 to 4-star accommodation including conference areas. The location is currently being established. It would be built by the Pelligra Group which owns the former Holden site at Elizabeth.
ORGANIC RECYCLING: A $5-6m green organic recycling business will be established in Whyalla by Peats Soil & Garden Supplies. Peats said it was confident it would have its business operating by mid-2019.
“This is the most exciting and important time in Whyalla’s history and we are entering into an unprecedented era,” Ms McLaughlin said.
“Over the next decade, Whyalla will be transformed, fuelled by growth in all sectors and intensely watched by the world.’’
Ms McLaughlin said the council was also looking into a new central sports and recreation hub and an aviation hub.
The “Big Reveal” was attended by Prime Minister Scott Morrison, Opposition Leader Bill Shorten, Premier Steven Marshall and State Opposition Leader Peter Malinauskas.
Mr Morrison dubbed Whyalla the “comeback city of Australia’’.
Mr Morrison said Mr Gupta had “defied the critics” and backed himself to transform the steelworks to make it globally competitive, securing roughly 2500 jobs that rely on investment and a potential next-gen steel plant.
“It’s a win for Whyalla. It’s a win for South Australia. And it’s a win for Australia. And a stronger economy for Australia,” he said.
Mr Marshall said Mr Gupta’s vision for Whyalla went beyond SA, stretching globally, and he had the support of the State Government.
Mr Marshall said the State Government’s commitment to Whyalla was proved through $50 million committed by the previous Labor government towards the steel plant’s transformation, and $100 million for a new high school which will be built in the town. Whyalla Chamber of Commerce and Industry president Ron Hay said Whyalla had a great future but the State Government must help the town secure the necessary workforce.
“The news is great, it’s a fantastic opportunity to move forward, what it does is bring investment, investment brings jobs and changes your economy,” Mr Hay said.
“The State Government, local business chamber and Regional Development Australia have a role to play to make certain that we have the appropriate skills base and there the discussions we need to have into the future.”
THE BIG REVEAL
■ A six to 12-month feasibility study to look into building a “next-gen mega steel” 10 million tonne per year steelworks in Whyalla was announced. The project would take three years to build if go-ahead is given.
■ A $600 million upgrade of the current steelworks, above, to a capacity of 1.8 million tonnes.
■ This includes a new rail and structural heavy section steel mill and a new pulverised coal injection plant.
■ A $145 million solar-powered horticulture project backed by Chinese investors.
■ A $45 million foreshore hotel, far right, backed by the Pelligra Group which owns the Holden site.
■ A $6 million green organics recycling business to be built by Peats Soil and Garden Supplies.
GFG ALLIANCE’S PLANS ALSO INCLUDE:
■ 10GW of combined energy production and storage nationally.
■ This includes 780,000 solar panels at Cultana, producing 600MW of power, with construction to start soon.
■ Expanding the Whyalla port.
■ Building a bigger lithium ion battery than the current Tesla battery at Jamestown which is currently the world’s largest.
■ Potentially setting up a bank to cater for companies in the $50 million-$500 million turnover range – potentially manufacturing electric vehicles in Australia, and...
■ Eventually getting involved in new housing developments in Whyalla.
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