‘Absolutely unprecedented’ steelworks move sparks concerns
Taxpayers footing GFG’s bills, dashed green hydrogen hopes and the long-term consequences for the industrial city are major concerns in the wake of the state government putting the Whyalla Steelworks into administration.
Opposition Leader Vincent Tarzia said today’s events have been “absolutely unprecedented”.
Tarzia said he was approached at 10am to get legislation through both houses of parliament to allow the government to take control of the Steelworks from billionaire Sanjeev Gupta’s GFG Alliance.
“Now what you’re seeing is a government in utter crisis,” Tarzia said.
“We’ve got serious questions that remain unanswered when the Premier talks about the administrator and that they’re fully funded, well, we will be forensically analysing how much is this going to cost the taxpayers,” he said.
“If there’s a bailout, how much is that going to be for?”
Tarzia said the Opposition wants to see the $50 million in funding pledged to the steelworks by former Premier Jay Weatherill used to pay off creditors and “ensure the longevity of the Whyalla Steelworks”.
“What we’re now worried about is the interest of mum and dad contractors, small business owners and operators in Whyalla and making sure that they get paid,” Tarzia said.
“So this is now a time for the Prime Minister to get involved, quite frankly, and the Premier has got to put people before politics and pictures.”
InDaily understands Prime Minister Anthony Albanese will join the Premier in Whyalla for an announcement tomorrow.
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A spokesperson for Industry Minister Ed Husic told InDaily they’ve been working closely with the Malinauskas government and commend their leadership.
“What’s going on in and around Whyalla can’t continue – workers kept in the dark, creditors – including the SA government – unpaid, a proud industrial city left wondering about its future,” they said.
“We want a strong future for Australian steelmaking and Whyalla has a big part to play in that.”
Rowan Ramsey, the Member for Grey, the electorate that includes Whyalla, Rowan Ramsey, said among the many questions about the move, it’s notable that the State Government is a creditor of the steelworks.
“I would be very disturbed if the state government was to get their money as creditors and then it ran out for the contractors and the smaller operators, so that’s a note of warning for us to watch out and see what the language is,” he said.
He said the region has a skilled workforce and facilities, but it is clear things have reached “a point of collapse”.
“I think we’ve got to take [the State Government’s] judgment as their judgment, and that things are to a point of collapse,” he said.
“The city got badly burned the last time we had a collapse here at the steelworks.”
The Whyalla Steelworks operations previously fell into administration in 2016 when its former owner, ASX-listed Arrium, collapsed. Arrium was sold to London-based GFG in 2017 in a deal heralded by former Premier Jay Weatherill as a “victory for South Australia”.
“What is the future? What are the future players for the plant? It seems strange to me that you would press the button on administration if you did not have confident operators willing to line up and have a bidding process or at least express interest in taking over the plant,” Ramsey said.
Former Senator Rex Patrick, who grew up in Whyalla, said he welcomes the action to tip GFG Alliance’s Whyalla operations in administration, though they’re “belated”.
“Three months ago Jacqui Lambie and I called on the State Government to put the Whyalla steelworks into administration,” he said.
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“500 jobs later and with three months of additional supplier debt, they’ve finally acted, even though Energy Minister Tom Koutsantonis said our call was reckless and the Premier Malinauskas was repeatedly negative on the idea of state intervention, wishfully preferring a wait and hope approach.
“The writing has been on the wall for GFG for a long time. Pity the many workers and their families who have lost their livelihoods while the Premier alternatively equivocated and postured on this crisis.
“It’s clear that the Premier’s hand has now been forced by the enormous weight of GFG’s indebtedness and its complete inability to secure investment to keep the steelworks in operation, let alone refurbish the 60-year-old plant into a modern industrial facility.”
Malinauskas said today that “only an intervention of this nature will protect the steelworks and its creditors”.
He said he has spoken to Albanese “frequently” about “economic opportunity” in the Upper Spencer Gulf.
“Green hydrogen fantasy”
Premier Peter Malinauskas admitted earlier this year that most South Australians aren’t as excited as he is about a $593m taxpayer-funded hydrogen power plant to be built near Whyalla. Photo: David Simmons/InDaily.
Tarzia said the Malinauskas Labor Government’s $600 million hydrogen project is intrinsically linked to the success of the steelworks.
“Instead of focusing on the Whyalla Steelworks there in the city, what they’ve been focusing on is this green hydrogen vanity project,” he said.
“Barely a shovel on the ground after four or five years and I mean, where will it end?
“You’ve got a Labor government that is obsessed with a green hydrogen fantasy.”
The plans to build a hydrogen power plant at Whyalla by 2026 have been heavily promoted by the government for a few years.
Malinauskas told reporters today they “couldn’t be producing hydrogen and not have a steelworks, that’s not an option”.
Ramsey told InDaily that while there are great concerns about the steelwork’s future, including the possibility of steel tariffs from the United States, work needs to be done to maintain optimism in the region.
“While I hold out hope there’s something like green hydrogen in the future, I think it’s fairly further down the pathway than some have been saying,” he said.
“And really that is the problem for cities like Whyalla, like Port Pirie, Port Augusta, we get this advanced trumpeting of a new age when, in fact, the building blocks, the foundations, aren’t in place yet.
“You’ve got to believe that there remains a future for the Upper Spencer Golf, and its manufacturing capacity because it’s got so many primary assets in its favour.
“But if we keep hanging extra regulation, extra costs and extra energy costs around these industries, we’ve got to keep remembering whether we like it or not, whether supplying the domestic market or international market, they are competing against international forces who are not putting the same restrictions on their industries.”
Further announcements from Malinauskas and Albanese are expected tomorrow.
