Move allows government to act on millions of dollars in debts owed by GFG Alliance and secure future of mid-north operationsFollow our Australia news live blog for latest updatesGet our breaking news email, free app or daily news podcastThe Whyalla steelworks has been placed into administration after the South Australian government rushed legislation through parliament and pledged “one of the most comprehensive industry support packages that this nation has ever seen”.The federal treasurer, Jim Chalmers, said on Wednesday that securing the future for steel in Whyalla was important and the commonwealth would have more to say on the matter “in due course”.Sign up for Guardian Australia’s breaking news email Continue reading…Move allows government to act on millions of dollars in debts owed by GFG Alliance and secure future of mid-north operationsFollow our Australia news live blog for latest updatesGet our breaking news email, free app or daily news podcastThe Whyalla steelworks has been placed into administration after the South Australian government rushed legislation through parliament and pledged “one of the most comprehensive industry support packages that this nation has ever seen”.The federal treasurer, Jim Chalmers, said on Wednesday that securing the future for steel in Whyalla was important and the commonwealth would have more to say on the matter “in due course”.Sign up for Guardian Australia’s breaking news email Continue reading…
The Whyalla Steelworks has been placed into administration after the South Australian government rushed legislation through parliament and pledged “one of the most comprehensive industry support packages that this nation has ever seen”.
Jim Chalmers, saying on Wednesday that securing the future for steel in Whyalla was important, said the federal government would have more to say on the matter “in due course”.
The move gives the government authority to act on debts owed by GFG Alliance, which bought the steelworks in late 2017, and secure the future of the mid-north operations.
Standing orders were suspended in parliament on Wednesday for the legislation to pass the lower and upper houses.
“GFG is no longer running the steelworks and associated mines,” the premier, Peter Malinauskas, said.
GFG has been under intense pressure from the government to pay debts to creditors of the Whyalla Steelworks and the state, which is owed “tens of millions of dollars”, including $15m to SA Water.
Malinauskas said the steelworks had been placed in the hands of an administrator to stabilise operations and explore a possible sale.
“It is unacceptable for such an important critical piece of economic infrastructure for the nation to be in a situation where its ongoing operations are so severely compromised,” he said.
Malinauskas said in Whyalla on Thursday he would announce “one of the most comprehensive industry support packages that this nation has ever seen”.
“Our mind turns to providing support for the industry and for the people that work within it, to be able to secure sovereign steel making in this country, not a bailout for GFG,” the premier said.
KordaMentha has advised the government it intends to appoint an experienced special adviser to assist the administration and is engaging with parties including BlueScope.
The administrator is fully funded “and that will mean that bills get paid”, Malinauskas said.
The federal treasurer was asked in Brisbane on Wednesday afternoon about the South Australian government’s decision to put the Whyalla steelworks into administration
“That is a really important town, and we are big believers in the future of Whyalla, we are big believers in the future of the Australian steel industry and Australian manufacturing more broadly … That has really driven us in our conversations with our South Australian counterparts,” Chalmers said.
“The prime minister has been talking to premier [Peter] Malinauskas, minister [Ed] Husic has been talking to his counterpart, I have been talking to [SA treasurer Stephen] Mullighan and we will have more to say about those discussions in due course.”
The move comes after months of uncertainty at the steelworks, and reassurances from its chair, UK billionaire Sanjeev Gupta.
Last Friday, Gupta 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 it collapsed in 2021.
This week, he said the steelworks was turning over $13-14m a week and hoped to be breaking even by the middle of the year.
The company announced in January that the plant had cast its first steel following a four-month shutdown that halted production and cost the company millions.
The state minister for energy and mining, Tom Koutsantonis, said that since 2017-18, GFG had iron ore sales values totalling $7.825bn from its SA operations and steel sales of $4.8bn since 2019-20.
“In the same period, we have seen nearly $800 million sent offshore … this is not a Whyalla problem – it is a GFG problem,” he said.
Opposition Leader Vincent Tarzia said the government was in chaos and Mr Malinauskas was scrambling because he had allowed the situation to spiral.
“Peter Malinauskas has just fired a cannonball through the heart of the South Australian economy and left a mess for future generations to clean up,” he said.
A report from the McKell Institute’s SA branch released on Wednesday said Australia would become “dangerously dependent” on Chinese steel imports if the steelworks were to fail.
“That would leave us completely exposed to coercion from strategic adversaries,” chief executive Ed Cavanough said.
“The Whyalla Steelworks (are) the only manufacturer of ‘long steel’ products which are core inputs into Australia’s transport, construction and manufacturing industries.”
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