$600m One Steel investment in SA
OneSteel has announced it will inject almost $600 million into its iron ore business in South Australia.
The steel producer has announced it will spending about $200 million to double the export capacity of the port at Whyalla from 6.5 million tonnes to 12 million tonnes per year.
OneSteel has also announced a plan to purchase WPG Resource's iron ore assets at WPG's Peculiar Knob site in central South Australia, near Coober Pedy.
It is expected to cost the steel company $346 million, and and additional $50 million will be spent to complete ongoing infrastructure works at Peculiar Knob.
OneSteel Managing Director and CEO, Geoff Plummer said the spending is to ensure the company is making the most of its port based in Whyalla.
"The port expansion opens a number of opportunities for increased sales from OneSteel's existing iron ore operations," he said.
"Progressing these two initiatives simultaneously delivers a significant step up in our port capacity and iron ore sales, including enabling us to leverage our existing infrastrastructure to deliver high grade ore to the market quickly, to take advantage of current iron ore prices," he said.
The $600 million investment was welcomed by South Australian Premier, Mike Rann.
"This investment ensures the long-term viability of Whyalla, and is a further boost to our growing mining sector, enhancing our export infrastructure," Mr Rann said.
"Not only will this plan further boost our exports and provide royalties to South Australians, but OneSteel's iron ore initiatives are also good news for the long-term sustainability of the company and its steel making plant at Whyalla."
The port expansion is expected to be finished by the end of 2012, and the WPG deal is expected to be completed by October.
