The future of the Tasmanian Electro Metallurgical Company manganese alloy smelter had been up in the air for the best part of a year.

Owner South32 revealed on Thursday it had entered into a binding agreement to sell the facility to GFG Alliance, which is chaired by Mr Gupta.

The jobs of some 250 workers at the smelter in Bell Bay, which was built in 1962, will be safe, the new owners said in a statement.

The facility will be part of GFG Alliance's Liberty Steel Group and Mr Gupta said the acquisition would help his goal of becoming a carbon neutral steelmaker by 2030.

"While living in Australia, I visited Tasmania a number of times and was impressed by its natural beauty, its commitment to renewable energy and the diversity of its industries," he said.

The smelter would strengthen GFG Alliance's steel-making capability in Australia and around the world, he said.

Premier Peter Gutwein said the sale was a big win for Tasmania amid the economic challenges of the coronavirus pandemic.

South32 had said a shift in global markets was behind its decision to either sell or mothball the smelter.

The sale is subject to final approval by the Foreign Investment Review Board.

Australian Associated Press