State Government intervenes to secure future of Whyalla Steelworks
The Malinauskas Labor Government has taken decisive action to secure the long-term future of the Whyalla Steelworks and associated mines by placing the business’s owner into administration.
GFG is no longer running the steelworks. The State has appointed KordaMentha as an administrator of OneSteel Manufacturing Pty Ltd under section 436C of the Corporations Act 2001. This move ensures the continued operation of the steelworks while exploring options for its future, including a potential sale.
Premier Peter Malinauskas said the Government had given GFG every opportunity to rectify its financial situation, but intervention was necessary to protect Whyalla’s future.
“GFG is no longer running the Whyalla Steelworks and associated mines. The South Australian Government has intervened. The steelworks is now in the hands of an administrator, who will stabilise operations and explore a possible sale to a new owner. This is a significant step, and one we do not take lightly. But it is a necessary one to secure the long-term future of Whyalla.”
He highlighted the broader impact on local businesses and suppliers, stating:
“Importantly, it’s not just the steelworks itself – it’s a vast number of local suppliers, small businesses owned and operated by South Australians, whose debts remain unpaid, whose revenue has evaporated, and whose livelihoods are at stake. Only an intervention of this nature will protect the steelworks and its creditors.”
KordaMentha will oversee the administration, ensuring that workers and contractors are paid, with the benefit of a government guarantee. Malinauskas reaffirmed the Government’s commitment to the region, saying:
“Later today, I will be travelling to Whyalla, where I expect to make further announcements about my government’s steadfast commitment to support the people of Whyalla and deliver the industrial transformation required to realise the economic opportunity in the Upper Spencer Gulf.”
Minister for Energy and Mining Tom Koutsantonis made it clear that the financial mismanagement lay with GFG, not Whyalla itself:
“This is not a Whyalla problem – it is a GFG problem. And now GFG finds itself in a position where its creditors are not being paid. These businesses simply can’t wait any longer for Mr Gupta.”
He outlined the significant profits GFG had extracted from the steelworks without reinvesting in its future:
“Since FY2017/18 Mr Gupta’s company has seen iron ore sales values totalling $7.825 billion from their South Australian operations, while since FY19/20 total steel sales have amounted to $4.8 billion. In the same period, we have seen nearly $800 million sent offshore including repayments arising from the Greensill collapse, payments of intercompany loans within the GFG group and funding towards the purchase of the Liberty South Korea business.”
With Whyalla producing 75% of Australia’s structural steel and being a critical part of the nation’s infrastructure supply chain, the Government is taking early and proactive steps to stabilise operations and secure the steelworks’ future.
Further announcements on a significant funding package to support Whyalla throughout this period of administration are expected tomorrow.
