Federal, SA governments tip in an extra $275 million for Whyalla steelworks as sales process continues

The federal and South Australian governments have announced an additional $275 million in funding to support operations, workers and suppliers at the Whyalla Steelworks as the sales process continues.

KordaMentha were appointed as administrators in February, with the state and federal governments announcing support totalling $2.4 billion for the site soon after.

This was described as coming 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.

According to a joint statement from industry minister Tim Ayres and South Australian premier Peter Malinauskas on Wednesday, the extra $275 million will allow KordaMentha and sales advisor 333 Capital “time to progress negotiations and find the right long-term owner”.

A sales process began on June 24. 

There is no preferred bidder, according to the release. According to a report by The Australian Financial Review last week, administrators gave BlueScope Steel a “right-of-last-offer”.

“Today’s funding announcement will give certainty to the thousands of people in Whyalla and surrounding communities connected with the steelworks,” added Ayres.

“The [government’s] significant intervention has stabilised the steel works while keeping workers in jobs and keeping this critical Australian steelmaking asset running while the most suitable owner is found.”

Last week Malinauskas said 33 parties had expressed interest in the steelworks, with 60 per cent of them offshore.

“We took decisive action to place the steelworks in administration, and together with the Commonwealth, have worked in partnership to put Whyalla in the best possible position to realise its economic potential with a modern manufacturing capability,” said Malinauskas on Wednesday. 

The steelworks were formerly owned by the Sanjeev Gupta-led GFG Alliance. Unpaid debts have been reported as totalling over $1.3 billion. 

Picture: credit Joeltbooth (public domain)

Further reading

BlueScope secures right-of-last refusal for Whyalla Steelworks

Sale process for collapsed Whyalla steelworks gets underway

Stokes family scouts Whyalla steel mill as sale process heats up

Whyalla steelworks blast furnace faces temporary shutdown amid funding concerns

Whyalla steelworks was ‘relying on luck for safety’ before administration