Whyalla plant central to GFG Alliance’s cost cutting exercise

GFG Alliance has revealed further plans to transform its Whyalla steelmaking facility on the back of its South Australian mine products.

The plant will transition to a direct reduced iron (DRI) facility to produce low-emission Greensteel from the company’s South Australian magnetite resources and domestic steel scrap.

The new plant will be fed by natural gas, making use of green hydrogen produced from GFG’s renewable energy projects, in alignment with the company’s ambition to be carbon neutral by 2030.

It will transition away from a blast furnace to an electric arc furnace (EAF) and new rolling mill.

This represents GFG’s bid to alleviate Whyalla’s financial woes.

The company will continue to review its Whyalla plant and identify further cost cutting opportunities within the next three months.

“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 chairman Sanjeev Gupta said.

“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.”

GFG plans to more than double its value-added steel products with the new plant in a bid to compete with Australia’s imported supply.

It intends to start the mill construction later this year, with the EAF and DRI facilities to follow next year.

GFG was forced to cut jobs in certain locations to achieve greater efficiency, which Gupta said he deeply regretted.

“While our primary focus will be on operational improvements and overhead optimisation, where we are forced to make reductions in roles, we will consult closely with employees, and will do everything possible to mitigate the impact,” he said.

“Through our workforce solutions initiative, we will strive to provide every blue collar worker impacted with an employment offer as an alternative to voluntary redundancy.”

GFG produces around 13 million tonnes of iron ore and metallurgical coal a year through subsidiary SIMEC Mining.

The iron ore mining business is located 60 kilometres from Whyalla Steelworks, incorporating the Iron Baron, Iron Knob and South Middleback Ranges mine sites.

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