‘s critically important Whyalla steelworks are on the verge of collapse, with tens of millions of dollars owed to creditors and up to 1,000 jobs on the line without government help.
The South n government on Wednesday announced OneSteel Manufacturing would be put into administration, following the passage of emergency legislation to override controversial British billionaire Sanjeev Gupta, who was previously regarded as Whyalla’s saviour.
KordaMentha has been appointed as administrators of OneSteel, ensuring Mr Gupta’s GFG group no longer ran one of ‘s two steelmakers.
New laws now enable the SA government to act on the debts owed by the GFG Alliance, which had owned ‘s only manufacturer of long steel used in railways, high-rise buildings and wind farms.
It had also made 75 per cent of ‘s structural steel.
Premier Peter Malinauskas said the GFC group had failed to repay creditors, giving his state government little choice but to act.
‘For months, my government has been carefully planning a strategy to address the challenges unfolding at the Whyalla Steelworks,’ he said.
‘Throughout that period, we gave GFG every opportunity to make good on its promises and to bring creditors back into terms.
‘It has failed to do so. So today, we have acted.’
The troubled steelworks is by far the biggest employer in Whyalla, a town northwest of Adelaide with a population of 22,000 people.
The SA government had grown increasingly concerned about the GFG Alliance being unable to repay its debts or secure new private funding, as it operated at a loss.
Mr Gupta, took over the steelworks in 2017 with promises to turn it into a ‘green steel’ manufacturer but its ageing coal-fired blast furnaces have instead broken down at a plant where gas pipes had threatened to explode.
Whyalla is ‘s only producer of long steel.
‘Whyalla is critical to sovereign n steel,’ Mr Malinauskas said.
‘It’s one of only two n steelworks, produces 75 per cent of n structural steel and it’s the only domestic producer of steel long products.’
The n Strategic Policy Institute regards its possible demise as a national security concern.
Whyalla steel has been used to build Optus Stadium in Perth, the Western Sydney Airport terminal and rail link, and Brisbane’s Cross River Rail project.
Energy and Mining Minister Tom Koutsantonis said GFG had sent $800million offshore since 2017 to bail out collapsed UK financial services company Greensill.
This was a company linked with Mr Gupta and founded by n businessman Lex Greensill, which had employed former UK Conservative prime minister David Cameron as an adviser ahead of its collapse in 2021.
‘This is not a Whyalla problem – it is a GFG problem,’ Mr Koutsantonis said.
‘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.’
The latest development is occurring only a week after American President Donald Trump announced 25 per cent tariffs would apply to steel and aluminium exported to the United States, with no exemption negotiated yet for .
Without Whyalla steel, would need to import steel during a national housing crisis.
Mr Malinauskas visited Whyalla on Wednesday to work out a funding package to keep the steelworks operational during the administration period, where the company trades until a new buyer is found.
‘Importantly, it’s not just the steelworks itself – it’s a vast number of local suppliers, small businesses owned and operated by South ns, whose debts remain unpaid, whose revenue has evaporated, and whose livelihoods are at stake,’ he said.
‘Only an intervention of this nature will protect the steelworks and its creditors.’
The Labor Premier promised Whyalla steel workers would continue to get paid.
‘During the administration workers and contractors will continue to do their job and will be paid with the benefit of a government guarantee,’ he said.
The appointment of an administrator occurred after state lawmakers on Wednesday morning voted to amend the Whyalla Steel Works Act 1958.
KordaMentha will will be able to trade on and pay all debts incurred during the period of administration.
The corporate advisory company had previously acted as administrator of the Whyalla steelworks, from April 2016 to September 2017, before handing it over to Mr Gupta’s Liberty OneSteel business when he took over.
He was regarded as a hero for rescuing the Whyalla steelworks after the Arrium group of companies went into administration.
Whyalla is one of ‘s only steel producers, along with BlueScope at Port Kembla in Wollongong.