PERTH (miningweekly.com) – London-based GFG Alliance will buy the struggling Arrium steel plant and iron-ore mining operation in Whyalla, South Australia.

GFG Alliance, headed by Sanjeev Gupta, on Tuesday submitted a modified offer for the Arrium Australia businesses, prompting the administrators to back the bid, despite anointing a Korean consortium as the preferred bidder earlier this year.

Administrators KordaMentha said the deal with GFG Alliance was subject to the approval by the Arrium committee of creditors and the Foreign Investment Review Board, with completion of the sale expected to occur next month.

“Taking all factors into consideration, including the timeframes required to complete a sale, the administrators and sale advisers Morgan Stanley decided the GFG Alliance offer was superior to the conditional offer from the Korean consortium with whom we were negotiating,” said deed administrator Mark Mentha.

Once the sale has been finalised, the administrators will move to the next stage of the administration, which included finalising returns to creditors, investigating the affairs of the Arrium group of companies, and reporting to creditors on the outcome of the administration.

Arrium, which appointed the administrator in April, includes the Whyalla steelworks and port, the OneSteel steel manufacturing, distribution and recycling unit and an iron-ore mining division.

Premier Jay Weatherill said the signing signalled the beginning of the end of the 15 months of uncertainty for Whyalla and heralded a new future for the state’s steel city.

The deal would secure the jobs of more than 5 500 Australian workers.

GFG Alliance development director Michael Morley said that the group had developed a comprehensive plan to secure the long-term future of the Whyalla Steelworks, which has faced many operational and financial challenges over recent years.

“Our plan focuses on reducing the cost of iron-ore feed, targeted modernisation investments, energy generation, expanding production and creating high-value export opportunities.  We are particularly excited by the opportunity for the Whyalla Steelworks to directly supply intermediate steel products to our UK rolling mills that are currently sourced from third parties.”