Whyalla steelworks blast furnace faces temporary shutdown amid funding concerns

The Whyalla steelworks' blast furnace will shut down for 36 hours starting Wednesday to allow for “urgent” maintenance work, as administrators warn the plant faces “severe challenges” and is in a “state of disrepair.”

Energy and Mining Minister Tom Koutsantonis told ABC Radio Adelaide on Tuesday that the shutdown will enable repairs to the refractory plates over the blast furnace and the taphole, which pours molten metal into the refinery.

“It's a very quick 36-hour shutdown,” Koutsantonis said, adding that the blast furnace will remain at an “appropriate” temperature during maintenance, with experts from ASX-listed steel company BlueScope monitoring the repairs.

The shutdown follows two separate months-long stoppages in 2024 that halted steel production and cost former owner OneSteel Manufacturing millions.

Administrator KordaMentha, appointed after the South Australian government forced OneSteel into administration on 19 February, has filed an affidavit seeking a 12-month extension to convene the next creditors meeting.

In the affidavit, KordaMentha administrator Lara Wiggins stated they “do not currently have sufficient funding to continue operations for twelve months” and expressed serious concerns about workplace safety at the facility.

“Since taking control of OneSteel, we have identified that OneSteel has sustained a long period of underinvestment, inadequate or no maintenance, poor health and safety practices, has insufficient spare parts and inefficiencies operationally and financially,” Wiggins said.

The state and federal governments announced a combined $2.4 billion rescue package in February, including up to $400 million to keep the steelworks operating during administration. When asked if additional funding might be provided, Koutsantonis said: “If there need to be top-ups, there will.”

KordaMentha has engaged corporate advisory firm 333 Capital to explore strategic options for a potential sale, with Wiggins estimating they would be “in a position to commence a sale or recapitalisation process in about 6 months.”

The administrator also claims it has yet to receive “unfettered access to the books and records of OneSteel” and may need to “compel” the former owner to hand over information.

GFG Alliance, chaired by British billionaire Sanjeev Gupta, owned OneSteel Manufacturing and claims to be owed upwards of $500 million.

In a statement, a GFG spokesperson said the company had made “considerable investment in the Whyalla steelworks in the last seven years, including over $1 billion in capex, and over $2 billion for repairs and maintenance.”