The jobs of about 250 workers at Bell Bay have been secured after an agreement was reached to sell the TEMCO manganese smelter to GFG Alliance, the owner of the Whyalla steelworks.
The pending deal was announced on Thursday morning and staff were informed at a meeting at the site, ending years of uncertainty.
South32 announced that Groote Eylandt Mining Company - owned by the Samancor Manganese joint venture - entered into a binding agreement to sell its shareholding of TEMCO to an entity within GFG Alliance.
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The sale is subject to approval by the Foreign Investment Review Board.
GFG will buy 100 per cent of the shares in TEMCO under the agreement.
The TEMCO smelter would be added to GFG Alliance's LIBERTY Steel Group.
GFG's billionaire owner Sanjeev Gupta said the purchase of TEMCO would strengthen the company's steel making capability.
"This acquisition will further enhance LIBERTY's drive to be self-sufficient and fully integrated across the supply chain, complementing our iron ore production in Whyalla, coking coal in Tahmoor and our Cultana Solar Farm to be built in Whyalla," he said.
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"By investing in key inputs, such as ferromanganese and silicomanganese we are able to generate value across the supply chain to ensure Australia has a sustainable and globally competitive steel manufacturing sector.
"It will also help neutralise the volatility in the markets, providing us a reliable supply at a stable cost."
The purchase was also part of the company's plan to be carbon neutral by 2030, given TEMCO's use of hydro energy.
South32 pleased with sale
South32 chief executive officer Graham Kerr said it was a milestone for the company.
"Today's agreement follows an extensive review of options regarding the future of our manganese alloy business. The transaction and our ongoing supply of ore to TEMCO will see the smelter, first established in 1962, continue to operate into the future," Mr Kerr said.
"TEMCO has a proud history of being a significant contributor to the local economy and we're pleased to have achieved what we believe is a positive outcome for our people, the local community and Tasmania. I would like to thank our workforce for their patience and dedication to continued safe operations throughout the review process.
"Looking forward, we are confident that GFG, a current TEMCO customer, is well placed to operate the smelter, with the acquisition representing an opportunity to further vertically integrate its steel business."
Uncertainty had surrounded the future of the smelter for several years as it underwent reviews into its viability.
Government sees a plus for jobs
The announcement was welcomed by the Tasmanian Government, believing it would secure the future of employment at Bell Bay.
Premier Peter Gutwein said it was crucial for the Northern Tasmanian economy.
"As a major regional employer, the securing of the ongoing operation of the smelter and the site's 250 jobs, will be very welcomed by TEMCO employees and the broader community," he said.
"As we build ourselves out of the COVID-19 pandemic, it is crucial business confidence remains strong to secure ongoing investment in Tasmanian industry and jobs, and today's announcement will support that."