The news of TEMCO’s apparent salvation will have spanning industry repercussions in the Northern Tasmania, according to stakeholders.
It was announced last week that South32 would sell the manganese smelting facility to Liberty Steel Group, a subsidiary of GFG Alliance.
The sale is subject to approval by the Foreign Investment Review Board.
Tasmanian Minerals, Manufacturing and Energy Council chief executive Ray Mostogl said from an industry perspective, seeing TEMCO continue to operate supported other mineral processors and supply chains by driving volume which in turn drove down costs.
“Whether it is electricity, gas or shipping and supply chains who benefit from having multiple customers, all mutually benefit when overhead costs of the suppliers, which are usually fixed, are effectively distributed across more users. Scale brings efficiencies and generally translates to lower costs,” he said.
“Volume drives volume – it becomes easier to attract new industries to the Bell Bay Advanced Manufacturing Zone and beyond because they have complementary suppliers and services located in close proximity.”
Northern Tasmania Development Corporation chief executive Mark Baker said the news was terrific for the region.
He said said new TEMCO owner, GFG Alliance’s Sanjeev Gupta, was well known for his interest in reducing carbon footprint through green energy, and the sale of TEMCO gave greater impetus to investments in renewable energy, particularly hydrogen production at Bell Bay.
In other news:
“With the state government’s plan to double its renewable energy generation and expressions of interest for hydrogen production closing shortly, Northern Tasmania is on the verge of an exciting new period of long-term development,” Mr Baker said.
“And what is great about that is it fits very clearly our competitive advantage and our brand, which in my view is vital for our economic growth.”
TEMCO employees told The Examiner that a number of facilities at the smelter were in need of upgrading, including $40 million on furnaces.
Mr Mostogl said mineral processing plants were capital intensive and required constant renewal expenditure, and producers in Tasmania had invested much in keeping assets relevant in the global commodity market.
“Having better certainty for TEMCO’s future will permit reinvestment decisions to be made over a longer time frame,” he said.
“Part of the due-diligence process a purchaser undertakes is to understand the condition of the assets and factor investment amounts into the commercial negotiation.”