The Korean consortium, as it is known, shaded the Sanjeev Gupta-led UK-based Liberty House group, which was the other shortlisted bidder for the Arrium group.

Gupta was recently feted at the Global Metals Awards as the CEO of the Year following Liberty House’s 18-month effort to invest more than £500 million to buy and turn around metals, energy and engineering operations across the UK, saving more than 5000 jobs in the process.

The Korean consortium plans to invest $1.4 billion to build a steel plant that uses the Finex process developed by Posco and Austrian company Primetals. 

The Finex process combines the coking plant, sinter plant and blast furnace into a single iron making unit. 

The Korean consortium wants Australian government support to keep the existing Whyalla steel plant going during the five years it will take to build the replacement plant.

Should the Korean consortium reach an agreement with the federal government, the next stage will be to strike a sales contract and one of the conditions of that will be Foreign Investment Review Board approval.

It is understood the FIRB has all the information it will require to deliberate on such an approval and should be able to do so fairly shortly after a sales deal is struck.

Arrium’s creditors will also have to sign off on the deal.

Arrium deed administrator KordaMentha and Morgan Stanley, which managed the sale process, will work with the consortium to finalise the sale contract as soon as possible.

KordaMentha partner Mark Mentha said: “After a 14-month administration and a nine-month sale process we are now an important step closer to providing certainty to employees, creditors, suppliers, customers and the Whyalla community”.

Australian Workers Union national secretary Daniel Walton said the South Australian and federal governments had to work with the preferred bidder to ensure Whyalla remained a steel-making town.

Walton said he represented more than 2000 Arrium workers.

“Through the continued cooperation of union employees, Arrium’s creditors and the administrator, a positive outcome is now eminently achievable,” he said.

“The Korean consortium requires government commitment to meeting some maintenance costs over a five-year period while the company invests $1.4 billion into building the Finex steelworks and an off-gas power plant.

“This is a deal our governments should absolutely make. It is in the national interest for Arrium’s operations, especially in Whyalla, to stay running.”

SA Treasurer Tom Koutsantonis said the state government would started detailed negotiations with the administrator, the federal government, unions and the Korean consortium to support the final sale of the business.

“The investment proposal put forward by the Newlake consortium aims to make Whyalla the first city outside of South Korea to adopt the innovative Finex process for steelmaking developed by Posco, one of the world’s major steelmakers,” he said.

Arrium went into administration on April 7 2016 with liabilities of about $4 billion.

Late last year its Moly-Cop grinding media business was sold to American Industrial Parters for US$1.23 billion.

In May Arrium received a $70 million bone from Indian coal conglomerate Adani, which signed a memorandum of understanding giving the steelmaker the sole right to supply the steel required for the double tracked 400km rail line between the central Queensland mine site and the Abbot Point port.