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Major investment in South Australia flags potential to emerge as global steel manufacturing hub

May 8, 2019

May 8, 2019

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Major investment in South Australia flags potential to emerge as global steel manufacturing hub

Mining and trading giant GFG Alliance and global steel manufacturer Liberty House, have been acquiring various steel projects around the world in a ventures even British billionaire Sanjeev Gupta, as leader of both companies, deems “audacious” in their potential.

Mining and trading giant GFG Alliance and global steel manufacturer Liberty House, have been acquiring various steel projects around the world in a ventures even British billionaire Sanjeev Gupta, as leader of both companies, deems “audacious” in their potential.

Just last week, it was announced that GFG had committed $100 million in Havilah Resources’ project, located in Australia’s Braemar Belt which has been proven to be rich in iron and copper, including Hawsons Supergrade ® – the world’s best iron ore product.

As part of a vision to capitalise on existing infrastructure in the Whyalla region, Gupta has already spent $700 million to acquire steelworks in the region courtesy of his 2017 purchase of the BHP mining offshoot Arrium. Gupta’s reported plans for SA’s third most populous region involve upgrading and revamping the existing steel plant in Whyalla to efficiently export mass-quantities of semi-finished steel, coking coal and high-grade iron-ore to various downstream operations across the globe.

Dubbed the “Next-Gen” project, Australian politicians from a myriad of sectors are encouraged by the plans, with SA Premier Steven Marshall announcing at the end of last year his own plans to capitalise upon the newly coveted region. This includes plans for the swift erection of a $45 million hotel to be built on the Whyalla Foreshore, as well as a $145 million horticulture development and a $6 million recycling business.

The influx of international buzz over the region has also led Whyalla’s city council to anticipate its population will “explode” from 22,000 to 80,000 by 2040, according to Premier Marshall. Prime Minister Scott Morrison has jumped on board the region’s praise, esteeming Whyalla with the auspicious title of “the comeback city of Australia”. Leader of the opposition Bill Shorten echoing his sentiments, lauding the “high-skilled” steel-workers ready to embark on the “historic endeavour”.

Beyond the Next-Gen project, Gupta has similar ventures underway in China and Europe, highlighting a firm commitment to the global industry where steel will play a fundamental role of the future as cities continue expanding upwards alongside population growth.

Given the endless list of infrastructural developments preparing to transform Whyalla into a steel hub powerhouse, Carpentaria Resources’ (ASX: CAP) neighbouring Hawsons Iron Project, also in the Braemar Belt, holds a strategic position. As a potential offtake partner, the project could potentially provide steel manufacturers with the world’s best iron ore product at 70% Fe, and is more advanced than the one GFG invested $100 million in last week.

With access to existing infrastructure and fresh international investment in the region, there appears to be strong synergies around the project’s product, place and timing where Carpentaria’s prefeasibility study identified a capacity to produce 10 million tonnes per annum, for Hawsons’ 20 year mine life.


Carpentaria Resources trades under the ASX code: ‘CAP

*Reach Markets have been engaged by CAP to assist with private investor management.

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