Document date: Tue 19 Jan 1999 Published: Tue 19 Jan 1999 00:00:00 Document No: 156935 Document part: A Market Flag: Y Classification: HOMEX - Perth
+++++++++++++++++++++++++ The Directors of Boulder Group NL (BGD) and Australian Overseas Resources Limited (AOV) are pleased to announce that NSW Premier Bob Carr today will unveil plans to build a A$234million stainless and specialty steel mini mill in Newcastle with Boulder Group NL and Australian Overseas Resources Limited as joint venture partners in the project.
The planned mini mill will produce stainless and specialty steels as a leading global supplier of steel plant equipment, will employ a continuous casting-to- rolling process, which lowers operating costs over conventional mini mills via reduced billet storage and manpower requirements, minimal energy inputs and higher output rates. The plant also enables the joint venture to make rapid changes to the product mix and specification to meet changing market demands.
The Directors of BGD and AOV are convinced that the Newcastle site will provide a strong competitive advantage for the joint venture, with very low power and reasonable land costs, a port near the mill, excellent infrastructure and a highly skilled workforce.
The joint venture has assembled a project team of internationally recognised experts in stainless/ specialty steel making, equipment manufacturing and stainless/ specialty steel marketing.
Mr, Kym Godson, former CEO of Atlas Steels will be appointed Managing Director of the operating company in Newcastle. Mr. Godson has had many years of experience in stainless/ specialty steel making and marketing, both in Australia and internationally.
Mr. Joachim von Schnakenburg, an engineer from Germany, who has held senior positions in European steel and plant manufacturing companies will be the Chief Technical Adviser to the joint venture partners.
Last year world consumption of stainless steel long product was three million tonnes and is growing at an annual rate of 4%.
Specialty steels are highly sought after by automobile and aircraft manufacturers because of their high strength, durability and low weight specifications. Given the high level of international demand for specialty and stainless steels, the joint venture has earmarked 60% of the Newcastle mill's production for export.
Revenues are anticipated to be in the order of A$324m p.a.
The joint venture will also focus on the China market which for stainless steels alone is forecast to continue to grow at 12.3% p.a. over the next decade. The joint venture is currently securing offtake agreements with several companies and investors, among them one of Europe's leading steel trading houses.
The NSW State Government has also endorsed the Newcastle Steel River Mini Mill Project, which would help develop the local Hunter Valley economy and generate 150 jobs in direct employment and create a further 1,000 jobs in downstream employment. In addition, the State Government has agreed to contribute A$50,000 towards the feasibility study on a matching basis with the joint venture, provide major project assistance through the Premier's Department and facilitate an efficient and integrated planning approval process. In turn, the joint venture will provide to the Government regular reports covering environmental, commercial and technical issues.
BGD Price at posting:
2.0¢ Sentiment: None Disclosure: Not Held
