Gupta says Whyalla blast furnace will start – again

Steelmaker GFG Alliance’s executive chairman Sanjeev Gupta put on a brave face in South Australia this week, vowing the company’s troubled Whyalla blast furnace would produce again and that the site had a future making green steel.

Gupta travelled to Whyalla in South Australia to inspect repair work on the blast furnace which has been out of action for much of the time since March when an uncontrolled iron breakout damaged the furnaces outer shell.

He also met with South Australian Premier Peter Malinauskas who raised concerns about unpaid royalties and the plight of contractors in Whyalla who have had little work with the blast furnace idle.

Gupta told ABC in a one on one interview that the blast furnace would ‘be running in days or weeks, not months’.

Gupta told ABC: “This plant has been running for 60 years. It’s not whether it has or has not had operational issues. That’s the business of the plant.

“The point is that we’re fixing it, it’s going to come back on operations very shortly and then it will run from then onwards full.”

However the public has been assured that the issues with the blast furnace were fixed on previous occasions, only for it to fail a second time in September.

Perhaps more problematic is the financial state of GFG which has been rocked by instability since the Russian invasion of Ukraine, and a world market flooded with dumped Chinese steel.

Several of the company’s steel works in Europe have closed and GFG still has issues with creditors related to the collapse of financier Greensill Capital.

However here Gupta said that the company’s Australian operations, which include electric arc furnaces it took over when it bought the failed ASX listed One Steel business.

Gupta is still promising more than $1 billion investment to decarbonise its operations to make green steel from locally sourced magnetite ore.

Gupta told ABC: “The future is green iron and green steel, and we have all the ingredients in Whyalla to make it a success more than anywhere else in the world.

“But the missing piece at the moment is energy, which in the long term is basically, is hydrogen.”

The SA government is spending $593 million building 250MWe of electrolysers and a world-first 200MW green hydrogen power station at Port Bonython, close to Whyalla.

Gupta said: “The right path for most shareholders would be to do what others are doing, to shut it down and save money and build [an] arc furnace, that’s not my path and we will stick to our path.

“Actions will always speak louder than words so let the blast furnace come back to operation, let it run full, and that’s a promise which we will keep and maintain.”

However the SA government is not taking any chances, and is planning for what action is needed should the Whyalla operation go into voluntary administration.

The government has received advice from the Energy and Mining Department on GFG South Australia’s financial position and an evaluation of VA restructuring scenarios.

Energy and Mining Minister Tom Koutsantonis told ABC radio: “Whyalla is not only strategically important to South Australia, but for our country.

“It is the last manufacturer of structural steel and rail line in this country.

“And if we’re to be a modern industrialised country, steelmaking has to be at the beating heart of it.”

Further reading:
Whyalla steelworks idle following shutdown damage
Whyalla steelworks restart ‘imminent’ – Gupta
World first hydrogen power station to get underway

Picture: Sanjeev Gupta