BlueScope to review NZ steel businesses

BlueScope Steel is reviewing the shape of its New Zealand business, blaming government policy for making things even harder.

The Australian steelmaker yesterday said it was undertaking a strategic review of its Kiwi operations — NZ Steel and Pacific Steel — and expects to have an update when it reports its earnings next month.

BlueScope said it expects to write down the value of the NZ businesses by A$200 million ($213m) on new expectations for lower sustainable earnings.

“The company is monitoring recent developments in other parts of New Zealand’s domestic industrial base,” it said in a statement to the ASX. It said the environment was “made more uncertain by public policy settings in carbon, trade and energy”.

New Zealand is already facing the exit of one of its biggest industrial operations, with Rio Tinto last week saying it planned to close the Tiwai Point aluminium smelter.

Last month, Jarden analysts said the Covid-19 lockdown could lead to NZ Steel and Pacific Steel reporting their first halfyearly loss in four years, making them the only BlueScope unit in the red.

BlueScope is the country’s only producer of steel, which it makes at NZ Steel’s Glenbrook site by smelting local ironsands with local and imported coal. It also owns the Pacific Steel business in O¯ta¯huhu and employed about 1400 workers across both sites last year.

The firm has been struggling in recent years amid low regional metal prices and increasing costs for electricity and gas.

Last month the firm shut part of its Glenbrook operation, with the loss of 51 jobs.