Labor’s $500m plan to rescue Whyalla from wipeout​on February 19, 2025 at 9:56 am

Malinauskas said the situation at the plant, which owed many millions in unpaid bills and was only operating sporadically, was unacceptable for its 1000 employees and imperilled Australia’s capacity to make steel.

“I would love to be there now,” Malinauskas said. “To look in the eyes of people who work at the steelworks and assure them of their future and the fact they are in a far better position right now than when they were this morning.”

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He declared that restructuring firm KordaMentha was “fully funded” to guarantee the workers’ future but declined to give financial details of the arrangement and hinted that the Commonwealth could provide additional assistance soon.

The steelworks started creating steel again in January after a four-month shutdown that cost the company millions.

GFG Alliance bought the facility for $700 million in 2017 and now owes its creditors an undisclosed sum, which Malinauskus said ran into tens of millions of dollars. A GFG spokesperson said it was assessing its options, following the government intervention.

US President Donald Trump’s declaration that he would impose tariffs on steel entering America has roiled the global market, but Whyalla’s steel is largely destined for the local, New Zealand and Asian markets where it is used in things like railway sleepers, wire and construction products.

Gupta’s GFG Alliance has been in financial difficulties since its key finance partner, the Australian-founded Greensill Capital, collapsed in 2021.

In 2012, then-opposition leader Abbott claimed Whyalla would be wiped off the map by the Gillard government’s carbon tax. Then-trade minister Craig Emerson responded by singing “No Whyalla wipeout, there on my TV” to the tune of Skyhooks’ 1970s hit Horror Movie.

Deputy Opposition Leader Sussan Ley said on Wednesday that state and federal Labor’s renewable energy goals were “killing the competitiveness of Australian manufacturing”.

“Federal Labor was elected on a promise that they would ‘rebuild manufacturing’ and yet today the Whyalla steelworks joins the long list of Australian manufacturers who have gone insolvent since Labor took office,” Ley said.

The federal government has set a nationwide goal for 82 per cent renewable electricity in the grid by 2030 and the South Australian government is aiming for 100 per cent by 2027.

Whyalla’s then-operator collapsed in 2016 despite Abbott’s 2014 carbon tax repeal. GFG bought the plant the next year for $700 million after it had been administered by KordaMentha, the same firm trying to save it now, underscoring the challenge of finding a buyer who can profitably run the plant long-term.

Energy Minister Chris Bowen boasted the move exemplified the clean investments that heavy industry would make, following the passage of the Albanese government’s signature climate laws capping carbon emissions from the nation’s biggest polluters.

The government awarded $63 million to the steelworks to help realise its green steel ambitions, in line with Albanese’s 2022 election commitment for a “revival of manufacturing built off the back of the availability of clean, cheap energy”.

Australian Workers Union national secretary Paul Farrow backed the government’s move and declared steelmaking provided “critical sovereign capability” while endorsing the continued shift to green steel.

GFG Alliance, which announced last week it had agreed terms for a potential settlement with Greensill’s creditors, was contacted for comment.

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