Whyalla steelworks to get rescue package
A support package worth billions is set to be announced after the South Australian government placed Whyalla’s steelworks in administration, as the hydrogen plant project is put on hold.
Billions will be poured into the Whyalla steelworks as part of a rescue package, in a bid to save thousands of jobs.
Prime Minister Anthony Albanese and South Australian Premier Peter Malinauskas will on Thursday visit the city to announce as much as $2 billion in funding, one day after the crisis-hit GFG Alliance was ousted.
The state government rushed legislation through the parliament on Wednesday, giving it authority to act on debts owed by GFG to secure the steelwork’s future operations.
Speaking to ABC Radio Adelaide, Malinauskas said the hydrogen plant project has been “deferred”, with the $600 million in funding to be allocated to operations in Whyalla.
More is expected to be announced on the future of Whyalla this morning.
Premier Peter Malinauskas confirmed the $600 million hydrogen plant project has been deferred. Image: David Simmons, InDaily
Albanese said Whyalla was critical to Australia’s need for sovereign steel while pitching the lifeline as a potential driver of green production.
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“There’s a real national interest here… but as well, the opportunity that is there for green steel manufacturing is enormous, and that will be increasingly lucrative as the world seeks to decarbonise,” he told Adelaide’s Five AA radio on Thursday.
GFG’s owner, UK billionaire Sanjeev Gupta, said the state was on the “wrong course” in forcing the operation into administration and he was seeking legal advice, according to an internal company memo obtained by The Australian Financial Review.
“This news will be disappointing to us all, not least to me personally, given the huge efforts we have all put in to save Whyalla in 2017 when it was losing $1 million a day, return operations in 2024 after a near-death experience, and promote Whyalla’s magnetite potential to a global audience,” Gupta reportedly said.
GFG Alliance owner, Sanjeev Gupta. Image: David Mariuz, AAP
Malinauskas said the nation needed to produce steel for itself or it would be relying on other countries for supply.
“In the current geopolitical circumstances, we need sovereign steel making this country,” he said.
“Taxpayers have to step up to the plate if we want to make steel as a country”.
It is not yet known how big a role the federal government will play in the support package, but Albanese and Industry Minister Ed Husic will be in Whyalla.
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The premier said the federal government had been kept up to date with the situation surrounding the steelworks as the crisis ramped up in recent weeks.
“It’s not a thing we do lightly,” he told Nine on Thursday, referring to the administration action.
“We can’t lose it (Whyalla).”
GFG has been under intense pressure from the government to pay debts to creditors of the steelworks and the state, which is owed “tens of millions of dollars”, including $15 million to SA Water.
Malinauskas said administrator KordaMentha would explore a possible sale of the business.
“I’ve been really determined to make sure that we’re not bailing out GFG,” he said.
“What we want to do is invest in the future of the new steelworks.”
The federal opposition said it supported the SA government’s decision to place the steelworks into administration and is awaiting details of the support package.
The move comes after months of uncertainty at the steelworks and reassurances from its chairman.
Gupta on Friday said a debt settlement deal had been reached with creditors of global financier Greensill Capital, which had advanced billions of dollars in credit to GFG before collapsing in 2021.
He later said the steelworks was turning over $13 million to $14 million a week and hoped it would break even by mid-year.
