Surprise delay in arc furnace for Whyalla steel starts South Australia government move to end Gupta era
Danieli’s patented Q-One technology, the first of its kind, allowed a direct feed from renewable power sources that could help to eliminate indirect emissions from Sanjeev Gupta's Liberty Steel Whyalla’s new steelmaking plant.
Whyalla steelworks owner Sanjeev Gutpa’s first significant move in 2023 towards his green steel aim also proved to be the beginning of the end of his control of the plant on South Australia's Spencer Gulf two years later.
In September 2023, Whyalla steelworks's coking ovens were turned off after operating for 55 years. Australian prime minister Anthony Albanese and South Australian premier Peter Malinauskas were at the ceremony to shut down the coking oven. They were at Whyalla also tpannounce $100 million for the planned Port Bonython hydrogen hub near Whyalla. Gupta told steelworks staff that the company was making a transition to a “brighter, greener, more productive” future, with hydrogen-powered production of the material at the centre of the “new era”.
Shutting down the coking ovens was the first step towards phasing out of coal-based steel making at its Whyalla plant. This would be fully enabled by an electric arc furnace.to be supplied by the Danieli company in Italy. The 160-tonne low carbon emission furnace would lift steelmaking capacity at Whyalla from one million tonnes per annum to more than 1.5 million tonnes per annum. The electric arc furnace would initially be fed by domestic steel scrap and other Fe-bearing materials to deliver an expected 90% cut in direct CO2 emissions compared with traditional blast furnace production.
Danieli’s patented Q-One technology, the first of its kind, allowed a direct feed from renewable power sources that could help to eliminate indirect emissions from Whyalla’s new steelmaking plant. The direct reduction plan would initially use a mix of natural gas and green hydrogen as the reducing agent, before fully transitioning to green hydrogen as it became available at scale. The low-carbon direct reduction iron, combined with scrap, could then be fed into the electric arc furnace to produce high-quality steel grades for infrastructure projects, and to serve the growing global demand for low-carbon direct reduction iron.
The South Australian state government had earmarked $50 million to help fund the $500 million electric arc furnace, to be paid when it was commissioned. When the government's energy and mining minister Tom Koutsantonis found when he visited the Danieli plant at Buttrio, in Italy's northeast, that the arc furnace would bot be going online unbtil at least 2027 – two years later than forecast.
This delay set off marathon undercover planning for placing the steelworks in administration in 2025.
Koutsantonies also was disturbed by learning that Gupta's companies have sent almost $800 million in Australian earnings, derived from more than $12b billion in steel and iron ore sales, to pay overseas creditors and for other deals, and "despite long-made promises, it has failed to invest back into the steelworks".
Internal GFG documents sighted by The Advertiser newspaper in Adelaide showed that in 2022-23, Gupta's GFG Alliance took out $156m from its Australian operations to cover the final payment to a Credit Suisse loan. In 2023-24, that amount rose to $274 million taken from Australia to fund other intercompany loans. The amount set to be extracted from Australia in 2024-25 was $342 million. GFG announced in 2025 that it had struck a deal with the creditors of its failed financier, Greensill that collapsed in 2021 leaving Gupta's companies with a $4 billion debt. GFC also announced it would put the Tahmoor coal mine in New South Wales up for sale.
Gupta's purchase of tens of millions of dollars worth of high-end Sydney real estate, including the $34 million harbourside mansion Bomera, angered the mounting list of creditors in Whyalla.
