Indian giant makes final pitch but it has competition
A giant Indian steelmaker has placed its decarbonisation credentials and global turnaround record at the center of its late-stage move to take over the collapsed Whyalla steelworks as a long-running sale process narrows to two remaining contenders.
Jindal Steel, part of a multibillion-dollar industrial conglomerate, is locked in a head-to-head fight with M Resources, the Australian mining and investment company led by coal billionaire Matt Latimore.
Two bidders are vying to buy the historic steelworks north of Adelaide and its local iron ore mines and port facilities from administrators.
The assets were previously owned by British billionaire Sanjeev Gupta’s GFG Alliance, but the business was placed into administration just over a year ago due to tens of millions of dollars in unpaid debt and royalties.
In a community deeply hurt by Gupta’s tumultuous exit, Jindal implores those concerned about returning the plant to foreign ownership to look to its record in the Middle East as evidence of its capability.
Since purchasing a half-completed steel complex in Oman in 2010, the company had invested in transforming the asset into a profitable and efficient integrated steel complex with the lowest carbon footprint of any operator in the region.
“I believe that no one should take anyone’s word for it; they should only rely on evidence and what is needed here is a proven track record of evidence,” Harssha Shetty, director of Jindal Steel International, said in an interview.
“Everyone needs to see what we have done in the last 15 years.”
The sale is being closely watched by the federal and South Australian governments, which have offered the winning bidder up to $1.9 billion in funding to upgrade the steelworks to a “modern, low-emissions” facility.
Jindal is stepping up efforts to leverage its depth of operational experience and argues that ensuring Whyalla’s future prosperity takes more than capital; It demands a battle-tested plan that the group has successfully implemented on the global stage.
The company plans to gradually replace Whyalla’s aging coal-fired blast furnace with “direct reduced iron” technology, which will initially run on natural gas, and an electric arc furnace that will melt scrap metal into molten steel. This would mirror the infrastructure used in Oman and could potentially reduce emissions by 30 percent.
“If you look at the story of Oman, it is a carbon copy of what we wanted to do in Whyalla,” Shetty said. “For us, it’s plug-and-play.”
However, Jindal faces stiff competition from M Resources, which has put forward its alternative bid in the national interest. Latimore said Whyalla’s high-quality steelmaking and iron ore assets were a natural fit for M Resources and said it would “do its best to get these assets into Australian hands”.
“If our consortium is to secure this transaction, that means awarding these assets to a well-competent Australian-led consortium,” Latimore said.
“We will focus on restoring assets to their full operational value, which means building a sustainable business that will provide security for the workforce and society.”
Shetty, who visited Whyalla two weeks ago, said he returned with an even stronger belief in Whyalla’s regeneration and long-term prospects, pointing to its unique position in the industry as an integrated mine-to-metal steel complex, highly skilled workforce and supportive community.
“I went to the store and met with senior management, they are ready to embrace change, they are hungry for change,” he said.
“Community is at the heart of our operations, and technology change is our specialty.”
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Nick Toscano is an economic correspondent for The Age and the Sydney Morning Herald.Connect with: X or email.
