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The new owner of the Whyalla steelworks has unveiled concept plans for a $1 billion transformation of the plant to boost its output and significantly reduce the cost of steel production.
GFG Alliance said its investments will increase steel production by about half to 1.5 million tonnes per year, widen the steelworks' product offering and open up new high=margin domestic and export markets.
The plan includes upgrades across the steelworks, including the rolling mill and investment in a new pre-conditioning process to reduce feed costs.
Further investments are also planned for the company's mining operations to increase iron ore reserves and "unlock large scale magnetite potential".
The company intends to explore an expansion of the Whyalla port to support its own operations and to provide for further economic development across the Spencer Gulf.
GFG Alliance, which recently invested in South Australian renewable energy company ZEN, is also planning a major energy investment in co-generation and capture of gases at the Whyalla plant.
The company completed its purchase of the stricken former Arrium business in September, bringing an end to more than a year of uncertainty for Arrium's workforce and the wider Whyalla community.
It has since completed a 100-day review of the business, which includes iron ore mines and the Whyalla port.
The company's executive chairman, British billionaire Sanjeev Gupta, said the plan would ensure the long-term sustainability of both the steelworks and the Whyalla community.
"Looking further out, we strongly believe that the transformation will also provide a solid basis for our broader vision of making Whyalla a centre of manufacturing excellence," Mr Gupta said.
"Through large investments in renewable energy and key infrastructure projects, we believe we can make Whyalla an attractive global hub for innovative, energy-intensive industry."
GFG Alliance will now proceed with feasibility studies which will continue through next year.
The studies will in part be funded by a $50 million grant from the South Australian Government, which was pledged to the new owner while the steelworks were in administration.
The company said the planned transformation would be contingent on further support from both the state and federal governments, who have welcomed the announcement in a joint statement.
"A strong and sustainable outcome for the Australian steel industry and the workers at Whyalla is what we are working towards," Federal Jobs Minister Michaelia Cash said.
This article first appeared on www.abc.net.au
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