Federal, SA governments pledge $2.4 billion to assist Whyalla Steelworks’ transition

The federal and South Australian governments have announced $2.4 billion in support for the Whyalla Steelworks, following the SA government’s move on Wednesday to put the site’s owner in administration.

In a statement on Thursday, it was revealed that the assistance will come in “three distinct parts”, comprising $100 million in immediate on-the-ground support, $384 million for stabilising the steelworks and $1.9 billion for investing in the site’s future.

The immediate support was listed as $50 million in creditor assistance payments, $32.6 million for infrastructure upgrades, and $6 million for a “Jobs Matching and Skills Hub”.

The $384 million for stabilising the steelworks will fund ongoing operations during administration, to ensure workers and contractors have ongoing work and pay.

The $1.9 billion tranche was explained as the SA and federal governments working with a new owner to invest in upgrades and new infrastructure, “vital to ensuring… a sustainable, long-term future.”

“A joint taskforce will also be set up to provide advice and expertise in the transition to a sustainable future” the statement reads. 

“The taskforce will engage with workers, the City of Whyalla, administrators and creditors to support a path forward.”

Albanese said the steelworks employs 1,100 workers and supports over 2,000 indirectly, and is critical to sovereign Australian steelmaking. 

In Wednesday, the SA government appointed KordaMentha as administrator of OneSteel, the division of GFG Alliance responsible for the Whyalla Steelworks. The steelmaker’s debts included $15 million to SA Water.

Whyalla, along with BlueScope’s Port Kembla site in NSW, is one of only two operating Australian steelworks. It produces three-quarters of Australian structural steel and is the only domestic producer of steel long products.

The previous owner of the steelworks, the ASX-listed Arrium, collapsed in 2016. GFG Alliance acquired the assets the following year.

Albanese and Husic made a separate announcement on Thursday pledging $1 billion for a Green Iron Fund. Up to half of it was allocated to the Whyalla steelworks’ transition, and “at least $500 million” open to applicants around Australia, both “existing facilities and greenfield projects”.

Picture: credit GFG Alliance

Further reading

S.A. Gov pushes Whyalla steelworks to administration, aims to take control

GFG Alliance targets break-even for Whyalla by mid-2025

Whyalla steelworks seeks refinancing amid financial struggles

Premier Malinauskas urges GFG’s Gupta to address financial obligations amid concerns for Whyalla steelworks