Product Processes

Typical steel companies tend to be only manufacturers of steel, meaning they have to purchase raw materials and also sell product through independent distribution networks. As a result such companies can be squeezed by both raw material providers and distributors, and some of the value that can be created in the manufacturing process gets transferred. For that reason OneSteel was established with its own iron ore mine for raw material to feed the Whyalla Steelworks as well as with its own distribution network.

One of OneSteel’s key competitive advantages is its iron ore mines that are situated just 60 kilometres from its largest production facility, the Whyalla Steelworks in South Australia. Almost half of the 2.6 million tonnes of steel that OneSteel expects to produce each year following the merger with Smorgon Steel will be made at the Whyalla Steelworks using iron ore. OneSteel’s three other production facilities are electric arc furnaces that make steel by melting scrap. With the addition of Smorgon Steel’s recycling business, OneSteel is also naturally hedged in scrap.

Mining Tenements

Outlined in yellow in Figure twenty three is OneSteel’s tenement covering its mining operations at the Middleback Ranges in South Australia. Also highlighted are the locations of the current operating mines: Iron Knight, Iron Duchess, Iron Duke and Iron Magnet. The mines are located approximately 60 kilometres from OneSteel’s Whyalla Steelworks.