BlueScope to lead international consortium in bid for Whyalla steelworks

Australia Broadcast Center

2 days ago

BlueScope Steel has confirmed its status as a frontrunner to take over the Whyalla steelworks, forming a consortium with three other international steelmaking corporations interested in purchasing the industrial facility.
After expressions of interest for the steelworks closed last week, BlueScope revealed to the stock exchange on Monday that it was leading a consortium that included Japan's Nippon Steel, India's JSW Steel, and South Korea's POSCO.
The group, which according to BlueScope has a combined market capitalisation of $115 billion, has submitted a non-binding expression of interest for the Whyalla steelworks.
"The consortium has identified Whyalla as a prospective location for future production of lower emissions iron in Australia for both domestic and export markets, with the potential to play an important role in the decarbonisation of the global steelmaking industry," BlueScope said in a statement.
"Should the consortium be invited to participate in the next phase of the sale process, the consortium will jointly conduct due diligence and engage with the South Australian and Federal governments regarding the announced funding support to maintain a sustainable steel industry in the region."
BlueScope added that any offer to acquire the steelworks would be subject to "hurdles", including due diligence and other considerations around return on investment for consortium members.
Nippon, POSCO and JSW are among the biggest steel companies in the world, ranking 4th, 8th and 12th respectively for total steel production in 2024, according to the World Steel Association.
Energy and Mining Minister Tom Koutsantonis said the consortium's interest in the steelworks was "great news".
"Seeing consortiums like this put their hands up — the prestige behind it, the expertise, the deep pockets, the long-term thinking — is really encouraging."
More than 15 national and international parties have passed the final expression of interest stage for the steelworks, according to the government.
The state government placed the Whyalla steelworks into administration in February, stripping ownership of the plant from British industrialist Sanjeev Gupta's GFG Alliance.
The plant has since been in the hands of administrators KordaMentha, which have been receiving expert advice from BlueScope on the steelworks' operations.
The state and federal governments have allocated $659 million to keeping the steelworks afloat through administration.
A further $1.9 billion is on the table to help the next steelworks owner decarbonise the facility and transition to green iron and green steelmaking.
Mr Koutsantonis reiterated the state government's expectation that a sale would not be finalised until the second half of 2026.
"It's not time to pop the champagne corks just yet," he said.
"But we are on the right track, and we are meeting the milestones we hoped to meet."
While the state government's confidence about Whyalla is growing, there is still doubt in the Spencer Gulf about another major employer.
The Port Pirie lead smelter, which employs about 900 people, is losing tens of millions of dollars a month, according to owner Nyrstar Australia.
The company has been publicly and privately lobbying for government help to protect its smelting operations in Port Pirie and Hobart, which it said have become uneconomical due to "market distortion" form China.
State cabinet is travelling to Port Pirie for a community meeting on Monday night, fuelling hopes for a support package announcement.
"What I would expect to see there, is we would have some answers in regards to Nyrstar," Port Pirie Mayor Leon Stephens said, adding that he had not been briefed on any funding announcement.
Cr Stephens, who is also running as a Liberal Party candidate at next year's state election, said the Port Pirie community needs surety about its future.
"The government's very tight-lipped on it," he said.
Premier Peter Malinauskas said on Monday a funding deal was "hopefully very close", but technical details were still being worked through.
He said the state government "is willing to invest" provided the money sets the smelter up for the future and protects local jobs.
"We accept, and it's undeniable, that Nyrstar is facing challenges not of its own making."
If Port Pirie's lead smelter were to close, the city could lose 2,000 people, according to a report released on Monday by progressive think tank The McKell Institute.
That accounts for more than 11 per cent of the city's nearly 14,000 residents, the institute said.
The report recommended the federal government consider taking equity stakes in struggling refineries and boost local demand for critical minerals.
McKell Institute CEO Ed Cavanough said the problem requires a coordinated national strategy, rather than repeat bailouts.
"We can't have a situation where every six months there's a new smelting operation that comes under threat and there's sort of a bespoke package each time," he told ABC Radio Adelaide.
"We don't want to create a precedent where in the future, investors or others come in and purchase assets and sort of intentionally let them go adrift waiting for a government bailout.
"What we want to see is a cohesive, national coordinated strategy for the entire sector."