The Whyalla blast furnace is offline again with no firm date for its return to steelmaking

The Whyalla blast furnace is again offline, with Sanjeev Gupta’s GFG Alliance unable to say when steelmaking will resume, just a day after the industrialist called for calm.

The Whyalla steelworks, pictured, is currently not making steel.

The blast furnace at the Whyalla steelworks is not producing steel for the second time this year, with the Sanjeev Gupta-led GFG Alliance unable to say how long it will be until normal operations resume.

The news came as Mr Gupta, in a column supplied to The Australian, said he remained committed to his vision for the Whyalla steel and iron ore operations, amid a global steel price crisis which had contributed to pushing them into a loss making position.

It is understood that Mr Gupta is currently in Whyalla.

The blast furnace went cold in mid-March, and damage to its shell during efforts to bring it back online delayed the restart of steelmaking, which only resumed around the end of June.

But steelmaking has again ground to a halt at Whyalla after “unwanted material’ found its way into the blast furnace.

A spokesperson for GFG subsidiary Liberty Primary Metals Australia (LPMA) did not put a time frame on how long it would be until steel production would resume when asked on Friday.

Sanjeev Gupta, executive chairman of GFG Alliance.

“LPMA’s expert blast furnace team is taking remedial measures to deal with unwanted material which may have crept in with limestone restricting internal slag movement in the Whyalla blast furnace,’’ the spokesperson said.

“The return to full operation will continue once the material is dealt with.

“While planning is still underway we expect to resolve the situation quickly. Customer needs continue to be met through existing inventory.’’

LPMA has been struggling, axing 50 white collar jobs in mid-August, following up with an estimated 100 jobs to go from the mining division over time as the company’s hematite iron ore operations are wound down.

Suppliers have also been complaining anonymously that they are being paid late.

Mr Gupta said in his column this week that “Whyalla remains my highest priority’’, but that a global crisis in the steelmaking sector meant there were tough times ahead.

He said the steelworks had lost $1.3bn since he bought it in 2017, and while it had returned to profitability for a period of about two years, it was once again making a loss.

He also refuted rumours that maintenance spending at the site had dwindled, saying claims worker safety was being compromised were untrue.

He said he remained committed to his green steel plans for Whyalla, which will involve several hundred million dollars of capital expenditure on a new electric arc furnace and associated direct reduced iron plant, scheduled to be in operation in 2027, two years later than first expected.

How the company plans to fund that expenditure has not been revealed, however the federal and South Australian government have committed $63m and $50m in grant funding respectively, tied to milestones.

“Where others see problems, I see the multi-generational opportunities that Whyalla offers for the future of green iron and steel, a mega trend that will boost demand and shape our industry for centuries to come,’’ Mr Gupta said this week.

“Through strategic investments, some favourable market conditions, and an enormous effort from an expert team sourced from around the GFG network, three years ago we turned the business from red to black - a truly remarkable achievement of which we are very proud.

“Unfortunately the pendulum has now swung back, and we face a global crisis worse than 2008 and 2015.

“With the right approach, including pinpoint focus on technical support and key upgrades, while cutting expired areas like the coke ovens and other costs, we will return to profit.”

Mr Gupta also sought to reassure stakeholders that the existing blast furnace was fit for purpose to operate until the new infrastructure is in place.

“I want to assure you that with the right care the steelworks can run safely for years, which will give us ample time to complete our green steel transition,’’ he said.

Mr Gupta has also come under fire for recently shelling out $12.5m to buy a waterfront apartment on Sydney Harbour, to add to his $34m Potts Point mansion Bomera, while his Australian business interests are struggling.

Originally published as The Whyalla blast furnace is offline again with no firm date for its return to steelmaking