Australia´s BlueScope Steel has announced it will lead an international consortium to participate in the Whyalla Steelworks sale process. In a release to the Australian stock exchange on August 4, BlueScope said it had reached a collaboration agreement with Nippon Steel (Japan), JSW Steel (India) and POSCO (South Korea) to remain in the running to acquire the steelworks. BlueScope said the consortium members presently have a collective market capitalisation of $115 billion, and a total steelmaking capacity of approximately 130 million metric tonnes. 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. “The consortium has submitted a non-binding and indicative expression of interest that outlines possible options for the Whyalla assets,” 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”.

However, the company stipulated that any decision to make an offer to acquire and develop Whyalla would be subject to due diligence and the consortium members’ return on investment hurdles. It said there is no obligation under the agreement for any of the consortium members to make an offer to acquire the Whyalla Steelworks. In 2017, POSCO made a bid to take over Whyalla, but was outbid by Sanjeev Gupta´s GFG Alliance.

The South Australian Premier, Peter Malinauskas, welcomed the BlueScope news and confirmed that more than 15 national and international parties had passed the final expression of interest phase, which closed on August 1. “This strong interest is a positive sign for the future of the Whyalla Steelworks and for the future of sovereign steelmaking capability in Australia,” Mr Malinauskas said. South Australia´s Energy and Mining Minister, Tom Koutsantonis, was even more upbeat. “Seeing consortiums like this put their hands up — the prestige behind it, the expertise, the deep pockets, the long-term thinking — is really encouraging,” he said. Mr Malinauskas said 333 Capital, the sales advisor to the process, would now move to solicit indicative bids from shortlisted parties which have expressed interest. He emphasised that, at this point in the process, with interest from multiple credible parties, there is no preferred bidder.

In its statement, BlueScope said it would leverage its detailed knowledge of the Australian steel industry and Whyalla assets as the consortium assesses potential options, opportunity and capital requirements. “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,” the statement said.

When the Whyalla Steelworks was taken out of Mr Gupta´s hands in February and placed into administration, the federal and South Australian governments immediately announced a $2.4 billion rescue package for the steelworks, to return it to profitable operations and prepare it for sale. Thus far, $659 million of that amount has been allocated; however, much more will need to be drawn down to secure an acceptable purchase offer. Critics might say this is a misguided use of taxpayers´ money: pouring billions into an ailing, failing and (some would say) badly located steelworks. Mr Malinauskas has said the Whyalla Steelworks was in a near-death state when it went into administration and that to not have intervened would have condemned it and many other businesses to oblivion. “That would mean the total collapse of….long-form steelmaking in this country. It would mean the end of Whyalla, it would mean the end of being able to produce rail and structural steel for ourselves,” he said. “That would be a pretty dark day not just for Whyalla and our state but for the nation, and the costs associated with that make this investment look very small indeed,” he added.

The government subsidies which have clearly encouraged BlueScope´s interest will have been noted by Nyrstar Australia, which has been lobbying for government help to protect its smelting operations in Port Pirie and Hobart. The Port Pirie lead smelter, which employs about 900 people, is losing tens of millions of dollars a month due to “market distortion” created by China, according to Nyrstar. The progressive think tank, The McKell Institute, has said if Port Pirie’s lead smelter were to close, the city could lose 2,000 of its 14,000 inhabitants. However, Mr Malinauskas evidently feels he has to draw a line somewhere and has said: “We’ve been very clear with Trafigura [Nyrstar’s parent company], that the only circumstances under which the South Australian government is going to invest any support in Nyrstar is if it’s about setting it up for an even better and commercial future”.

Away from the world of government subsidies, Alter Steel, which is part of the Westview Group, has finalised its contract with Italian engineering firm, Danieli, to supply the technology and equipment for its $750 million steel mill in Pinkenba, Queensland. When complete, the new mill will be the first steelmaking facility in Australia to deliver wire rod, hot-rolled mesh, spooled coil and bar directly from a single site. “We undertook a deliberate process to ensure the technology we selected was proven, commercially scalable and fit for Australia’s future manufacturing needs,” Grant Johnston, Managing Director of Alter Steel, told ASN. After reviewing global steelmaking technologies for more than 18 months, Alter selected Danieli’s MIDA QLP® with Digimelter® (EAF). Danieli says the Mi.Da® eliminates billet reheating and cold storage, and cuts energy use by up to 75% compared to traditional methods. Its endless casting and rolling process turns scrap into finished product in under two hours.

When operational (by late 2027), the Pinkenba facility will produce 500,000 metric tonnes of reinforcing steel products annually, using 100% local scrap. Johnston said the site is being designed for 100% renewable energy compatibility and will only emit 0.37 tonnes of CO₂ per tonne of steel; an 80% reduction compared to traditional blast furnaces. As part of the overall project, Alter Steel has also signed a memorandum of understanding (MoU) with the scrap metal dealer, Sims Limited. Under the terms of the MoU, Sims will exclusively supply Pinkenba with up to 550,000 metric tonnes of ferrous scrap annually. Sims will also manage Alter Steel’s scrap inventory on a just-in-time basis. “This collaboration with Sims completes the supply chain to deliver the cleanest steel in Australia, right here in Queensland,” said Mr Johnston. “Sims is a global leader in metal recycling, and we’re proud to have them alongside us on this project. Together, we’ll transform local scrap into high value steel, cut emissions, and keep manufacturing onshore,” he added.