GFG announces updated plan to transform Whyalla steel into a world leading “GREENSTEEL” facility

Media release > 10th June, 2020
Whyalla Steelworks aerial image
  • Plans revealed for a Direct Reduced Iron facility, and a new Electric Arc Furnace in addition to the heavy-section combination Rolling Mill previously announced to serve Australia’s rail, mining and infrastructure projects with domestic GREENSTEEL.
  • Will position Whyalla to become a world-leading, carbon-neutral steel producer, utilising South Australia’s abundant magnetite resources and Natural Gas, transitioning in time to green hydrogen produced from renewable energy.
  • GFG has established an expert global team to review Whyalla Steelworks’ current performance and to identify and implement improvement opportunities.

GFG Alliance (GFG) has today announced its updated Whyalla GREENSTEEL Transformation Plan in a major milestone for the business, as it seeks to secure the long-term future of its South Australian based steelworks.

This investment blueprint builds on previously-announced plans for a new Rolling Mill to be built by Danieli Group, Italy. Today’s announcement reveals further plans for a sophisticated Electric Arc Furnace (EAF) – utilising cutting edge technology for energy optimisation – and a Direct Reduced Iron (DRI) facility to produce low-emission GREENSTEEL from GFG’s abundant South Australian magnetite resource and domestic steel scrap.

The new DRI plant will be fed by Natural Gas, in time transitioning to green hydrogen produced from GFG’s own renewable energy projects including Cultana – one of Australia’s largest solar farms being built in Whyalla. Combined, these new facilities will produce advanced steel long products for the Australian construction, critical infrastructure and mining industries for generations to come.

While there is an exciting future ahead, Whyalla’s legacy primary steel making facilities remain financially challenged. To this end, leveraging GFG’s international operations, an expert team has been assembled with a three-month mandate to identify and implement major cost reductions and efficiency improvements. GFG’s recently-announced global CEO for primary steelmaking and integrated mining, Mr Paramjit Kahlon, will take direct responsibility for the review, working closely with GFG’s Executive Chairman, Sanjeev Gupta, in leading this critical activity. Stakeholders will be invited to participate and provide valuable insights and recommendations.

The review, which will conclude in September, will build on initiatives already in place, including the first wins at Whyalla’s aged Rolling Mill hitting a record production of 40,000 metric tonnes in May. The international members of the review team are already utilising communication technologies, engaging key stakeholders remotely until such time as arrangements can be made for them to travel to Whyalla given the current COVID-19 constraints. GFG has also put in place extra funding arrangements to ease pressure on the challenged business while the review undertakes the turnaround to identify savings and efficiency gains.

Commenting on GFG’s GREENSTEEL Transformation plan, Mr Gupta said:

“This exciting plan will not only transform the Whyalla business into an internationally-competitive steel manufacturer, it will be our first primary steel plant to be transformed to GREENSTEEL, helping fulfil our ambition to become the world’s largest carbon-neutral steel producer by 2030.”

“I believe in domestic manufacturing in Australia using its abundance of natural resources. South Australia, in particular, has one of the largest deposits of magnetite ore, and some of the best conditions for renewable energy. These are the key ingredients needed for GREENSTEEL which
enable this exciting venture. We will more than double the value-added steel products we make with our new plant, capturing the growing infrastructure requirements of Australia, which are currently being
covered by imports.

“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. We plan to start construction later this year for the mill, and next year in 2021 for the EAF and DRI facilities. With this, the Whyalla Transformation Project will finally become a reality.”

Commenting on GFG investments in Whyalla and plans to undertake a three-month review, Mr Gupta said:

“Since buying the business out of administration in 2017, we have made significant investments in the Whyalla operations, completed much-needed maintenance – after years of under-investment by previous ownership – and introduced a comprehensive continuous improvement program thanks to the hard work of our employees.

“Despite the substantial improvements that have been achieved, the existing Whyalla facility – especially when faced with the additional impact from COVID-19 – remains financially-challenged.

“I am committed to taking a direct and personal role with the review team. Our global experts have experience in returning similar assets to financial viability in difficult conditions, and I am confident that with the cooperation of all our stakeholders, the existing Whyalla steel making operations will continue to operate during the three-year transition period while the new GREENSTEEL plant is built.”

Commenting on GFG’s commitment to its workforce, local community and suppliers, Mr Gupta said:

“It is important that we all embrace change as we drive towards financial viability of our current operations, in-turn enabling our long-term vision of a sustainable, world-class, carbon-neutral steelworks at Whyalla, supported by a vibrant and growing community,” he said.

“Finalising the funding and the ultimate construction of the Transformation Project, while ensuring the immediate financial viability of the operations, will enable GFG’s vision of a revitalised, world-class Whyalla operation to become a reality.

“With the continued hard work and commitment of all our employees and stakeholders, I remain confident that we will be successful in our mutual goal of creating an exciting and vibrant future for generations to come.”

About GFG Alliance

GFG Alliance is a collection of global businesses and investments owned by Sanjeev Gupta and his family. The Alliance is structured into three core industrial pillars; LIBERTY Steel Group, ALVANCE Aluminium Group and SIMEC Energy Group, independent of each other yet united through shared
values and a purpose to create a sustainable future for industry and society. GFG Alliance employees 35,000 people, across 10 countries and has revenues of USD $20bn. GFG Alliance is a leader in sustainable industry with a mission to become Carbon Neutral by 2030.

MEDIA CONTACTS

Further information contact:
Luke O’Donnell
Manager External Affairs
+61 438 294 377
luke.odonnell@gfgalliance.com

Sean Kelly
Media Manager, Whyalla
+61 411 054 643
sean.kelly@gfgalliance.com

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