GFG Alliance completes landmark acquisition of Arrium

Media release > 31st August, 2017
Global metals, industrials and energy group, the GFG Alliance, today completed the acquisition of Australia’s leading integrated mining, recycling, steel manufacturing and steel distribution business, creating a new future for thousands of workers and their communities.

Global metals, industrials and energy group, the GFG Alliance, today completed the acquisition of Australia’s leading integrated mining, recycling, steel manufacturing and steel distribution business, creating a new future for thousands of workers and their communities.

Executive Chairman of the GFG Alliance, Sanjeev Gupta, and his team, working closely with management and the workforce, will now embark on a 100-day review of the business and finalise a transformation plan to put the 6,000-worker enterprise, on a competitive, sustainable footing.

This will include finalisation of plans for major capital investments across several sites, utilisation of excess production capacity, reduction in raw material costs, greater energy efficiency, the development of new high value-added steel and steel-based products and services for the Australian market and increasing export of iron ore and steel products.

Speaking ahead of tomorrow’s formal handover event at the iconic Whyalla integrated plant in South Australia, Mr Gupta said: “This is a historic moment. After a long period of uncertainty, the GFG Alliance and this highly-skilled and committed workforce can now work together to be the authors of an exciting new chapter in the Australian steel industry. As we now focus on our plans for investment and growth, we have every reason to be confident that this business shall increase its already significant role in supporting the construction of Australia’s future.”

Mr Gupta outlined some key elements of GFG’s intended transformation plan to expand the capability and capacity of its new Australian businesses, including:

  • Investing up to US$1 billion across the Whyalla steelworks and mining businesses to:
    • modernise key parts of the plant
    • expand steel-making capacity
    • expand the range of steel grades and downstream products produced;
    • improve energy generation capabilities, including a new co-generation power plant to capture and reuse waste gases, generating on-site captive power.
  • Boost capacity utilisation at the world-class electric arc furnaces and rolling mills in Melbourne, Sydney and Newcastle.
  • Align, improve, and expand production and service capabilities to capitalise fully on the significant infrastructure project growth in Australia.

In addition, the GFG Alliance is also exploring further potential investments in Australia, including:

  • A new state-of-the-art, world class steel plant of four to five million tonnes at Whyalla;
  • Major port and infrastructure development;
  • Complementary mining activities, including iron ore and coking coal, to ensure raw material supply at stable prices;
  • New electric arc furnace capacity to melt more of Australia’s ferrous scrap at home, focused on excess scrap generating regions, pursuing GFG Alliance’s globally renowned GREENSTEEL strategy, creating long-term sustainable value and jobs;
  • New large-scale pumped hydro and solar power plants to assist in addressing Australia’s energy imbalance and high energy costs.

Mr Gupta said his core business model is to own and manage as much of the supply chain as possible – adding value at each stage – and, as such, his Australian businesses will benefit greatly from integration with the rest of the global group. An early win, he said, would be the opportunity to make high grade (API) slab at Whyalla to feed the group’s plate mill in Scotland which will be used in the group’s large diameter SAW pipe mills in the North East of England.

He added that low-carbon GREENSTEEL production, recycling local scrap, using renewable energy, remained the group’s guiding principle and this approach would be extended to Australia.

The GFG Alliance executive chairman thanked all stakeholders including local, state and federal governments, the workforce, trade unions, customers and suppliers for supporting the business through challenging times. “Many people have made significant sacrifices and played a critical role in sustaining the operation through the difficult months of administration and we want to pay tribute to them for their patience and resilience which has now given the GFG Alliance this opportunity to take the business forward,” he said.

Australia’s Federal Minister for Industry, Innovation and Science, the Hon Arthur Sinodinos AO said: “The federal government welcomes today’s handover to GFG Alliance and looks forward to working with them and the South Australian Government to promote a globally competitive steel industry.”

Premier of South Australia, Jay Weatherill commended GFG and Mr Gupta for their investment and seeing the potential of the region. He said: “Today, marks the beginning of a hugely promising partnership between Whyalla and GFG Alliance. The vision and strategy that underpins this acquisition means that the livelihoods of thousands of people, who have made great sacrifices along the way, have been secured. South Australia looks forward to seeing Whyalla’s steel integrated into GFG’s global operations and increasingly competing in the global marketplace.”

The former Arrium mining and port operations will now be rebranded as SIMEC Mining and SIMEC Infrastructure divisions respectively while OneSteel and its operating divisions will become Liberty OneSteel. ARC, Austube Mills and product brands such as Cyclone and Waratah will remain unchanged.

The acquisition of the former Arrium businesses, which employ around 6,000 people, builds upon the GFG Alliance’s strong track record of acquisitions and turnarounds in the UK where it is now one of the country’s largest industrial employers with more than 5,000 staff in its Liberty House and SIMEC groups.

MEDIA CONTACTS

Australia / Asia
Namrata Kundu
+61 478 750 643

UK / Europe
Eoghan Mortell
+44 7977 555 116

Lois Brearley (iNHouse Communications)
+ 44 207 240 7338

Our latest releases

View all media releases