GFG Alliance’s executive chairman says he remains confident that the Whyalla steelworks’ troubled blast furnace will be fully operational “very shortly”, after having travelled to the plant this week. 

Sanjeev Gupta, who sat down for a one-on-one interview, told the ABC that a plan was in place to fix the coal-fired furnace, which has been offline for almost six months this year. 

“I don’t want to give you a specific date but what I can tell you is that it’ll be running in days or weeks, not months,” he said.

“It’s very difficult, tedious when a blast furnace is shut and you’re trying to bring it back, and it’s constantly lancing, it’s very frustrating.

“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.”

GFG Alliance was unable to make steel at its Whyalla plant from mid-March to early July after a malfunction with its blast furnace, during which time hundreds of its workers took at a pay cut of between 20 and 30 per cent.

It then went offline for a second time last month after GFG said that “unwanted material” had been found inside the furnace. 

At the same time, several of Mr Gupta’s steel mills in Europe have shutdown, while creditors in the UK pursue the steel magnate for hundreds of millions of dollars related to the collapse of financier Greensill Capital.

“Our business in Australia is profitable overall, despite Whyalla’s problems,” Mr Gupta said. 

“In terms of what is happening in other parts of the Alliance — in terms of UK and Europe — that is overall the most stressful part of the industry. Europe is facing a perfect storm, it’s got its issues which started with the war and they’re continuing.

“Different parts of the world have different stress in the steel industry, and Europe is the worst, and hence has got the worst problems, and we’re handling them, and we’re tackling them … but it’s not impacting our Australian business in any way shape or form.”

Mr Gupta also defended purchasing a $12.5 million harbour-side Sydney apartment after 48 jobs were axed at the steelworks and reports that several contractors were owed payments.

“My commitment to Whyalla does not get impacted by the purchasing of an apartment in Sydney,” he said. 

GFG also recently announced it would be cutting costs, including on maintenance work at the plant, as it contended with a prolonged global slump in steel prices.

Meanwhile, the South Australian government raised concerns that GFG could go into administration after it revealed the company had fallen behind on its royalty payments.

Mr Gupta said he believes the steelworks’ workforce will grow once the blast furnace is back up and running again. 

“For a long time the company’s had a policy that the Whyalla supply chains are prioritised so, by and large, actually the issue is not that they’ve been paid, the issue is there’s been a lack of work and the lack of work comes from the fact the blast furnace hasn’t been working,” he said.

“If we can get the blast furnace back up, and not just up but actually running back to full capacity over a million tonnes, that automatically generates employment for the town.

Long-term vision

By his own admission, GFG has lost more than $1.3 billion since taking over the Whyalla Steelworks in 2017, but he is still promising more than $1 billion investment to decarbonise its operations to make green steel. 

“The point about talking about the losses is not because I’m proud of the losses, but it’s the fact that the commitment is absolute,” he said.

“Especially the last two years, Whyalla has taken more than $400 million, and I’m talking about steel and mining together.

“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.”

Mr Gupta said he did not ask for taxpayer funding during a cabinet meeting on Monday, but instead asked the South Australian government to deliver on its plans to build a hydrogen power plant and storage facility near Whyalla.

“The green iron and green steel plant is not just my objective, it’s not even just the state’s objective, it’s not just a national objective. It’s a global objective.

“But in the short term, as a bridge, we also need solutions for natural gas, so we need some infrastructure investments and so on, which we discussed and talked about.”

Mr Gupta said that he remained committed to his vision of producing green iron and steel in Whyalla, adding that “my job is to persevere”. 

“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.”