The Whyalla steelworks in South Australia has been forced into administration, with the state government seizing control of the troubled operation following an emergency parliamentary meeting on Wednesday morning.
Owned by British steel magnate Sanjeev Gupta’s GFG Alliance, the steelworks has been struggling with mounting debts, reportedly owing tens of millions to creditors, including the South Australian government and local subcontractors.
South Australian Premier Peter Malinauskas announced the government had appointed KordaMentha as administrators, vowing to stabilise operations and find a new owner.
“This means GFG is no longer running the Whyalla steelworks and associated mines,” Malinauskas said.
“The South Australian Government has intervened to protect the future of steelmaking in this country.”
The Whyalla steelworks, a critical economic driver for the regional town of 22,000 people on South Australia’s Eyre Peninsula, has been operating under financial strain for months.
Malinauskas framed the move as essential to safeguarding Australia’s sovereign steelmaking capabilities, stating,
“We could not have GFG holding back steelmaking in this country… This is about securing the future of the industry and the people who rely on it.”
The intervention was made possible by urgent amendments to the Whyalla Steelworks Act, passed by both houses of parliament on Wednesday morning. The changes granted the government the authority to call in debts and assume control of the plant.
The steelworks directly employs around 1,000 people, with many more jobs linked to its operations. Malinauskas sought to reassure workers, saying the government’s intervention meant their future was more secure than it was before.
“The administrator is fully funded, meaning bills will be paid, work orders will be fulfilled, and workers can turn up without fear of sudden shutdowns,” he said.
Malinauskas also hinted at a major industry support package, to be unveiled on Thursday, calling it “one of the most comprehensive this nation has ever seen.”
Sanjeev Gupta acquired the Whyalla steelworks in 2017 for $700 million, pledging to modernise it into a “green steel” plant. However, Malinauskas argued those plans had not materialised.
“Mr Gupta’s vision was largely the right one—it just hasn’t been realised,” Malinauskas said.
GFG Alliance recently announced plans to sell its Tahmoor Coking Coal Mine in an effort to pay down debts related to Whyalla. However, the South Australian government determined that GFG’s financial position was deteriorating too rapidly, making intervention unavoidable.
KordaMentha, which previously oversaw Whyalla’s administration before Gupta’s acquisition, will now work to stabilise the plant and explore potential buyers. One key player in discussions is BlueScope Steel, a major Australian steel producer.
A creditors’ meeting will be held within seven days, where stakeholders will decide whether to accept KordaMentha’s appointment or propose an alternative administrator.
Despite the uncertainty, Malinauskas remains confident in the government’s intervention.
“This is the right course of action to secure steelmaking in this country.”
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