In the United Kingdom the government has intervened to manage more steel facilities while in Australia a government agency has failed to fund a buyer for a large complex.
Government intervention in the ownership or management of steelmaking facilities has continued to shape the sector’s landscape in both the United Kingdom and Australia.
In both countries, the former involvement of the financially troubled GFG Alliance has been a factor in the present state of distressed mills, including the Whyalla blast furnace/basic oxygen furnace (BOF) complex in Australia and the Speciality Steel UK Ltd. (SSUK) electric arc furnace (EAF) facility in Britain.
Early this week, a joint announcement from agencies and ministries in Australia and the state of South Australia revealed that “efforts to restart Whyalla Steelworks’ blast furnace over recent months have been unsuccessful.”
Continue the ministries, “Years of failure to invest in the steelworks by the previous owner has resulted in the blast furnace being beyond repair.”
The government has been working with a restructuring advisory firm called KordaMentha that now is “in consultation with workers and unions to understand future workforce needs informed by proposals for the future of the steelworks,” according to the announcement.
It is unclear how that future may take shape, although South Australia Premier Peter Malinauskas remarks, “The future for Whyalla rests in new equipment, new capital, which is what we are achieving through the sale process.”
The elected official refers to a $1.35 billion “sovereign steel package” he says is geared toward finding “the right new owner with the capacity to deliver new steelmaking facilities to underpin Whyalla’s long-term future.”
In the meantime, at least two other groups of investors have announced projects to build new recycled-content EAF mills in Australia.
A company with building supply roots called Alter Steel is planning to build an EAF rebar mill in the state of Queensland using equipment supplied by Italy’s Danieli & C. S.p.A.
This summer, a company called Greensteel Australia announced it had selected a 17-acre site in the state of New South Wales where it will invest in a new steelmaking complex. Also working with Danieli, Greensteel says it will install a direct-reduced iron (DRI) plant, two EAF lines and two rolling mills, one for rebar and the other with high-speed rail capability.
Last year in the U.K., a court in London placed Liberty Speciality Steel UK Ltd. (SSUK) into compulsory liquidation, ruling in favor of a technique favored by GFG’s creditors and the government of the U.K.
Last week, U.K. Business Secretary Jonathan Reynolds announced the government “will work towards the public acquisition of” SSUK.
Earlier this summer, the U.K. government took ownership of another steelmaking complex. Then, it was the blast furnace/ BOF campus in Scunthorpe, England, known as British Steel.
That steel mill had been owned by the People’s Republic of China-based Jingye Group, which had purchased British Steel in 2020. The U.K. government reacted after Jingye announced it intended to idle blast furnaces at the site.
Now, the U.K. government says it wants to “support” the more than 1,300 people working at SSUK sites in Rotherham, Stocksbridge, Brinsworth and Wednesbury, England. The firm’s EAF melt shop capacity is in Rotherham.
In his recent statement, Reynolds says the government’s “clear preference” has been to “secure a credible private-sector solution” for the future of the steel facilities.
“A lead bidder was identified earlier this year, but after detailed due diligence and extensive discussions, the government has now concluded the proposal on the table could not provide the long-term stability, certainty and value for money that workers, communities and taxpayers deserve,” states Reynolds’ office.
Concludes that statement, “All future decisions and spending commitments will be subject to due diligence and funded from existing government budgets.”
Says Reynolds, “We do not intervene in private companies lightly, but nor can we simply stand aside and allow the future of this company and over 1,300 jobs to be decided by default.”
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