Whyalla steelworks: Albanese Government lays out $2.4 billion lifeline to keep mill afloat

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Whyalla steelworks: Albanese Government lays out $2.4 billion lifeline to keep mill afloat

The Albanese Government has laid out a $2.4 billion lifeline to keep the Whyalla steelworks afloat, following the South *********** Government calling in creditors on billionaire Sanjeev Gupta’s GFG group.

In announcing the deal, which would see $100 million spent on immediate assistance and a further $384m stabilising the steelworks, Prime Minister Anthony Albanese said this was about creating certainty going forward, “to secure jobs, not just for the present, but importantly for this and future generations.”

Small creditors, with debts of $5000 and up to $1m have been offered a bailout by the South *********** Government that would see them pain in return for handing over the dividends received as part of the administration process.

“This about relieving them with all the burden and the struggle associated with administration so they can get on with doing what they do best, and that’s keeping this place running and making steel in this country,” South *********** Premier Peter Malinauskus said.

The steel mill employs 1100 workers and supports more than 2000 indirectly, with many smaller creditors based in the town of Whyalla.

However Mr Malinauskas said the government is not bailing out Sanjeev Gupta and the GFG Alliance.

“There is no bailout of GFG. They will have to deal with the process of administration,” he said.

A further $1.9b would be made available for the long term viability of the steel mill to assist a new owner to invest in upgrades and new infrastructure.

$500m of that would come from the Commonwealth Green Iron Investment Fund, while the South *********** Government’s share will be redirected from the State Office of Hydrogen Power which would be “wound back”.

“There’s no point in producing hydrogen if there is no customer,” Mr Malinauskus said.

“The first step is to actually realise what was supposed to happen from GFG, and that is getting the magnetite out of the ground, investing in the steel works, transitioning to electric arc furnace, and that needs to happen concurrently with the potential new owner of the steelworks.”

Camera IconFormer owner Sanjeev Gupta had plans to sell a coal mine to support the Whyalla Steelworks. Credit: TheWest

Whyalla accounts for 75 per cent of *********** structural steel and is the only domestic producer of long steel products. The Prime Minister said given its importance to the *********** market, the continuation of the steelworks was a national important issue.

“The idea that Australia would be vulnerable for the shocks that can occur; a pandemic, international trade issues. We live in an uncertain world,” Mr Albanese said.

“Australia needs to be more resilient. It’s one of the lessons of the pandemic.”

More to come.

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