Furnace Failure Dogs Steel Firm

Newcastle Herald

Tuesday November 30, 2004

By IAN KIRKWOOD and AAP

ONESTEEL'S Newcastle mills may be fed with imported raw steel after the company's Whyalla blast furnace broke down yesterday for the second time in as many months.

OneSteel told the Australian Stock Exchange yesterday that the latest breakdown would cost the company 35,000 tonnes of production and earnings "in the order of $10 million".

The October 11 shutdown cost 80,000 tonnes of production worth $30 million, after a fire broke out during the repair period, extending the delay by a fortnight.

In all, the shutdowns are likely to cost the South Australian plant 10 per cent of its annual production, and about 6.5 per cent of OneSteel's output when the 500,000 tonnes of production from its Sydney mini-mill is considered.

OneSteel spokesman Mark Gell said the company's managing director, Bob Every, flew to Whyalla yesterday morning.

Mr Gell said investigators from UK-based furnace-maker and steel company Danieli Corus brought out for the October problem were returning to find why the "temperature irregularities" were continuing.

OneSteel shares fell to their lowest level since July after the news, and finished down 10 cents, or almost 4 per cent, at $2.56.

Mr Gell said the Whyalla problems would have a minimal effect on Newcastle production, but it was likely the company would have to import steel rods and billets, as it did after the October problem.

He said it would take at least 10 days to reheat the furnace, and steel would be shipped to Newcastle from Asia if needed to meet customer schedules.

Mr Gell said the furnace was designed to operate at between 1450 and 1550 degrees.

If it fell below 1450 degrees it was hard to tap off slag and to remove iron from the furnace.

The furnace was built in 1968 and was relined in 1981 and again in July this year.

Mr Gell said the specialists would stay in Whyalla for a few months this time.

© 2004 Newcastle Herald

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