Steel producer and iron ore miner OneSteel says it is not looking to “grow” its steel business but believes the business will be an important generator of cash.

OneSteel announced earlier in April that it would change its name to “Arrium” in the hope the new tag better reflects its various mining businesses rather than its steel-making heritage.

OneSteel chief executive Geoff Plummer told the ABC’s Inside Business program that over the last 10 years the profits of the steel business had “waxed and waned” amid some “okay” times and some poor times.

However, the steel business had been a great cash generator and it had funded OneSteel’s investment in iron ore.

“I’m certainly not looking to grow into the steel space,” Mr Plummer said.

“(But) it can be a good contributor to our portfolio and create value for our shareholders.”

Mr Plummer also said he was “pretty optimistic” about the outlook for iron ore.

“We’re still, I guess, exposed to the China story in a positive way, and I’m still pretty confident in terms of the mining consumables business and commodities generally,” Mr Plummer said. “Our iron ore business directly…I think the outlook for that’s still very good.”

Mr Plummer also said the federal government’s carbon tax could pose a long-term risk.

“Longer term, I think there’s a danger if we get too far ahead of the rest of the world,” he said.

“I think the short-term threat is generally weak demand outside of the resources sector and the impact of high interest rates and high currency.”