Sandford eventually took over the Lithgow Works on the basis of a seven year lease of 10/- per ton output and 2/6d for financing arrangements with an option to purchase and which he subsequently exercised to take over the works, estate and colliery for £62,600.

At the time of the original lease, the Lithgow works consisted of six puddling furnaces, one ball furnace, two mill furnaces, steam hammer and 475 mm mill. A sheet rolling mill was installed in 1894 and a steel furnace in 1900, the first cast of steel in Australia being accomplished in the same year. He had also put in two cupola foundry furnaces which were used to re-melt pig iron that had been 'at grass' when he took over the plant. The Siemens-Martin furnace installed for steel production, however, held only about five tonnes metal and was ridiculously small for the expected use.

At about the same time a galvanizing pot and corrugating plant appears to have been installed as a business summary developed by Lysaght in 1907 notes:

Oct. 1901. The works as then existing were under offer to a London Syndicate for £50,000 in shares, the Company to pay a royalty of 9d per ton of coal used and to provide a working capital of £250,000.

The output of Galvanized Sheets was then 2500 tons per annum. Rail freight to Sydney 10/6 per ton and it is stated that they have at Lithgow, fire clay, fuel and ore about 50 per cent and red hematite about 50 per cent, and there are other grades of ore in the district, and a Siemens blast furnace in course of operation and the cost of steel slabs about £6 per ton.

Estimated cost of pig iron something under 40/- per ton.

Estimated that it takes 2½ tons of ore to 1 ton pig, about 1 ton of coke to smelt 1 ton of ore. And it takes 2 tons of coal to make 1 ton of coke.

The coal at Lithgow is estimated to last 100 years. Cost delivered at smelters at pit mouth under 3/9d per ton. Coal consumed at the works was then debited at 4/2d per ton leaving a good profit to the colliery.

Government bonus as then proposed, was considered equal to 10/- per ton on pig iron and 12/- on billets etc.

Proposed furnace (BF) estimated capacity 850 tons per week. W. Sandford expressed his great wish to work in harmony with J. L. Ltd. and he stated that if the proposals were not accepted in London, he would be prepared to submit them to J. L. Ltd. on like conditions.

The blast furnace referred to above, probably had a capacity of up to 800 tonnes per week but at that size, was probably the largest in the southern hemisphere. It was blown-in in 1907, at a time when Sandford appeared to be facing a critical financial crisis and when he was troubled with obtaining sufficiently low cost raw materials, with a lack of tariff protection and with a financial burden compounded by the new blast furance costs greatly exceeding estimates. By the middle of 1907, W. Sandford Ltd. had a bank overdraft of £128,000.

Australian Academy of Technological Sciences and Engineering