BlueScope (ASX:BSL), Australia’s largest steelmaker, announced on Monday that the international consortium formed for a potential acquisition of the Whyalla steelworks and associated iron ore mines will rigorously examine return on investment hurdles as the process advances. BlueScope operates the Port Kembla steelworks near Wollongong. The company has partnered with Nippon Steel (Japan), JSW Group (India), and POSCO (South Korea) in a consortium to potentially acquire the South Australian steelworks and iron ore mines, which entered administration in February.
According to BlueScope’s statement to the ASX on Monday, any decision to make an offer for acquiring and developing expanded operations at Whyalla is contingent upon thorough due diligence and meeting the consortium members’ return on investment expectations. BlueScope emphasised that there is no obligation for any consortium member to make an offer to acquire the Whyalla Steelworks.
The consortium, spearheaded by BlueScope, aims to utilise BlueScope’s detailed understanding of the Australian steel industry and Whyalla assets to evaluate potential options, opportunities, and capital requirements. BlueScope sees Whyalla as a possible location for future low-emission iron production in Australia for both domestic and export markets. This could potentially play a significant role in the decarbonisation of the global steelmaking industry.
The sale of the operations is being managed by administrators KordaMentha and its 333 Capital arm. The administrators reportedly received approximately 15 expressions of interest by the August 1 deadline.
