OneSteel approves “Project Magnet”
Australia's largest long steel products producer, OneSteel, announced that its Board approved the A$325 million ($245 million) Project Magnet, which will commercialize OneSteel's magnetite iron ore resources and upgrade the Whyalla Steelworks. The project's initial estimate was A$250 million. According to the company, the project will generate A$1.5 billion in additional revenue over the life of the project. Previous revenue estimates were around A$1 billion. The project will improve the cost competitiveness of the company since it will enable OneSteel to obtain low-cost, high-quality iron ore from its Whyalla mines to produce steel. OneSteel's move from hematite to magnetite as feed for the Whyalla Steelworks provides the steelmaker with a lower cost of manufacturing and the ability to produce more steel. Furthermore, the changed process for iron and steel production, and the associated changes to logistics, will bring significant environmental benefits. For example, moving one of the key elements of production from a dry to a wet process will greatly reduce fugitive dust. The company plans to complete the project by January 2007. Upon the completion of the project, OneSteel will have a surplus of hematite iron ore available for sale. The company intends to sell up to 4 million tons per annum of this ore over a ten-year period.