Wesfarmers Industrial and Safety announced that its Coregas business is engaged in negotiations to amend its contract with BlueScope Steel Pty Ltd for the supply of industrial gases to BlueScope's Port Kembla steel operations.

The negotiations follow the announcement by BlueScope Steel Limited, on 22 August 2011, that it would significantly restructure its Port Kembla operations. The restructure includes a shutdown of the No.6 Blast Furnace, which has significantly reduced BlueScope's demand for industrial gases.

It is expected that negotiations to amend the contract will be completed in the first quarter of calendar 2012.

As a consequence of the change in operations at BlueScope, and having regard to an associated review of the Coregas business, Wesfarmers Industrial and Safety presently estimates that there will be a resulting non cash writedown in the carrying value of Coregas of up to AUD 190 million in the current financial year.