Sanjeev Gupta unveils $1bn Whyalla steelworks revamp
Steel tycoon Sanjeev Gupta has given The Advertiser first details of a billion-dollar upgrade of his Whyalla iron ore and steelmaking facility, which will “more than double” its capacity.
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New billion-dollar expansion plans for the rejuvenation of the Whyalla steelworks have been announced by UK tycoon industrialist Sanjeev Gupta, who also flagged the need for “major cost reductions” at the “financially challenged” operations.
But Mr Gupta, speaking to The Advertiser from Wales last night, said he remained committed to not cutting a single job at the Whyalla iron ore and steelmaking facility.
Mr Gupta will today announce plans to build a “direct reduced iron facility” to produce iron from gas and later hydrogen at Whyalla, as well as an electric arc furnace to replace the existing blast furnace.
These will sit alongside a $600 million steel rolling mill, which is now expected to start construction later this year.
Mr Gupta said the new projects had not been exactly costed but would be in the $1 billion-plus range, and were a key plank in the company’s strategy to produce carbon-neutral steel by 2030.
The Whyalla expansion projects, first revealed in December 2018, are lagging behind schedule, with Mr Gupta telling The Advertiser late last year that a $500 million solar farm to be built at Cultana should break ground by the end of March, and that the company had been hoping to get approvals for the new steel mill by then also, and to start construction soon after.
The solar project is now expected to start construction next month, with Mr Gupta saying there were delays to approvals for grid connection.
The DRI facility and the electric arc furnace are scheduled to be built in 2021.
But the loss-making steelworks remain “financially challenged” Mr Gupta says, with an expert group to review the operations and look for “major cost reductions and efficiency improvements” over the next three months.
“I’ve always very clearly expressed my commitment to the Whyalla workforce, there will be absolutely no roles which will be impacted,’’ he said.
Mr Gupta said the new mill would “more than double” Whyalla’s capacity to produce steel, and have the capability to supply all of Australia’s steel needs for rail, construction and the mining sector.
“With this, the Whyalla Transformation Project will finally become a reality,’’ Mr Gupta said. “We have to date invested over $60 million in the engineering and design work for this project and are now ready to take the next steps of finalising funding and commencing construction.’’
GFG said it had put in “extra funding arrangements to ease pressure on the challenged business while the review undertakes the turnaround to identify savings and efficiency gains’’.
Mr Gupta said he was in talks with the State Government over a $50 million funding package promised by the previous government but said he had never asked state or federal governments for handouts, though underwriting support might be required.
“It is important that we all embrace change as we drive towards financial viability of our current operations,” he said.