Indian billionaires the Gupta family have splashed out on an electric arc furnace and a rod and bar rolling mill from the disused Sheerness steelworks.

Industry insiders say the equipment, if new, would cost £1 billion. It is not known how much they have paid for it.

Sanjeev Gupta, executive chairman of the Liberty House Group, wants the equipment for his recently reopened steelworks in Newport, south Wales. He took over the mothballed site in July 2013, saving 150 jobs, and has since renamed it Liberty Steel Newport (LSN).

He is hoping to boost production and create up to 1,000 jobs.

The 41-year-old complex, which is four times larger than the Sheerness site and has its own dedicated docks, has been producing steel coil since October.

The Guptas have always said they want to reintroduce scrap melting and rolling long products at the base in Newport.

Mr Gupta said this week: “Using the equipment from Sheerness to expand Newport is our preferred option.”

But he warned that the Sheerness equipment might end up abroad.

Mr Gupta said: “Steel-making is an energy-intensive business so, if the situation regarding future UK energy costs and security of supply doesn’t become clearer, we may have to consider moving that equipment outside the country to either India or the USA.

“Both of these offer healthy market demand, positive government support and energy security.”

Under the terms of the sale by Peel Group, which runs Sheerness Docks, the equipment from the former Thamesteel plant must be removed by June.

The equipment, which includes an advanced VAI Fuchs EO EBT electric arc furnace along with Fuchs ladle furnaces and a Concast four-strand caster for billets, should produce up to 800,000 tonnes of steel a year.