building a strong Future, together - OneSteel

economyThe economic resurgence of OneSteel Whyallaallows for a more positive view on the futureFinancial performanceAs the major employer in Whyalla,OneSteel’s success is generallymirrored in the local community.However, it is not only the number ofpeople we employ that makes us anintegral part of Whyalla and SouthAustralia, but also the positive spinoffsour achievements can create.As we have continued to grow anddevelop, we have brought new peopleinto the city, increased confidence inWhyalla’s future and in-turn sparkeddevelopment. This has boosted thelocal and State economies and helpedand the city of Whyalla itself continued to occur atan accelerated pace in the 07/08 financial year.Following on from the investment of morethan $100 million in re<strong>building</strong> our blastfurnace, an historic and significant milestonefor the business was the transition from usinghematite ore as the feed for the Steelworks tousing magnetite ore.Hematite ore has been mined in the Whyallaarea for more than 100 years and used by theSteelworks since 1940. Limited future resourcesof hematite had caused uncertainty over thefuture of OneSteel Whyalla and therefore thebroader future prospects for the city itself.to be taken by OneSteel, the South AustralianGovernment and the Whyalla community.OneSteel invested $402 million in theconversion and our confidence in the futurehas flowed on to the community. An additionaland very positive outcome of the conversionto magnetite ore was that OneSteel was ableto participate in the resources industry growththat was fuelled by China, allowing us to exportour remaining hematite ore. We also remainwell placed to increase our export sales in themedium to long term.Local economyWhyalla played a significant role in OneSteelposting yet another record profit of $315 million –up 59% on last year’s record $197.5 million profit.Some of the major factors contributing to oursuccess included:• The transition of the Steelworks tomagnetite feed, extending the life of the siteout to at least 2027• A resultant lower cost of steelmaking basedon the benefits of magnetite feed (the startof delivery of value in use)• Loading of 22 Cape vessels• A total of 4.4 million tonnes of iron ore salesmake Whyalla a more attractive placeto work, live and visit.OneSteel’s magnetite resources are moreplentiful and conversion of the SteelworksReflecting the business success of OneSteelWhyalla, the local economy has flourished. Thishas been in part driven by the more generalresources boom, the success of Project Magnetand the future outlook for our industry.• A vastly cleaner pellet plant operation• Commissioning of the new desulphurisationprocess in Steelmaking (cleaner and at alower cost)• Significant water savings right across theMedian house prices continued to rise, gainingabout 10% during the 07/08 financial year, andSteelworks, as well as early stages at allmine sitesWhyalla City Council received developmentapplications totalling more than $56 million –up nearly $16 million from the previous yearand almost triple 05/06. More than 600 newallotments were released during the year asmajor housing developments came to fruition,with 189 new dwellings built in the period. AEach of these factors – together with ourcurrent exploration to increase our ore reservesthrough Project Magnet Phase Two – placesOneSteel Whyalla in an enviable position goingforward, providing ongoing security and successfor the business.Project Magnet has introduced alower cost of steelmaking courtesyof the magnetite process. OneSteelis now able to make more steel forthe same amount of pellets.major new industrial estate also opened on landthat had been given to the council by BHP duringthe original establishment of OneSteel in 2000.The economic transformation of both OneSteeland Whyalla has been a major success story.17