The Whyalla steelworks in South Australia has been forced into administration following severe financial difficulties. The state government stepped in after an emergency parliamentary meeting on Wednesday morning, placing control of the troubled operation under the management of Korda Mentha, a firm appointed as administrators. This move comes after months of mounting debts and financial strain for the facility, which is owned by British steel magnate Sanjeev Gupta’s GFG Alliance.
South Australian Premier Peter Malinauskas confirmed the government’s intervention, stating that GFG Alliance would no longer be in control of the steelworks or its associated mines. Malinauskas stressed that the government’s primary goal is to stabilize the steelworks’ operations and find a new owner to safeguard the future of steel production in Australia. “This is about securing the future of the industry and the people who rely on it,” Malinauskas said, emphasizing the importance of maintaining the nation’s sovereign steelmaking capabilities.
The steelworks, a key economic driver for the regional town of Whyalla (population 22,000), has been operating under financial stress for several months. The South Australian government’s intervention was made possible by urgent amendments to the Whyalla Steelworks Act, which were passed through both houses of parliament on Wednesday. These amendments granted the government the legal authority to assume control of the plant and manage its debts. While the steelworks directly employs around 1,000 people, many more jobs are indirectly linked to its operations. Malinauskas reassured workers that the government’s actions would provide greater job security. “The administrator is fully funded, meaning bills will be paid, work orders will be fulfilled, and workers can turn up without fear of sudden shutdowns,” he said.
Sanjeev Gupta had acquired the Whyalla steelworks in 2017 for $700 million, with plans to modernize it into a “green steel” plant. However, Premier Malinauskas argued that Gupta’s vision, despite being fundamentally sound, had not come to fruition. “Mr Gupta’s vision was largely the right one—it just hasn’t been realised,” he remarked. The financial strain on GFG Alliance led to its announcement of plans to sell its Tahmoor Coking Coal Mine in a bid to reduce debts tied to Whyalla. However, the rapid deterioration of the company’s financial position left the government with no choice but to intervene.
KordaMentha, the firm that previously oversaw Whyalla’s administration before Gupta’s acquisition, will now work to stabilize the plant and explore potential buyers. BlueScope Steel, a major player in the Australian steel industry, is expected to be part of the discussions as a potential buyer. A creditors’ meeting is scheduled within the next seven days, where stakeholders will decide whether to accept KordaMentha’s appointment or propose an alternative administrator.
Despite the uncertainty surrounding the steelworks’ future, Premier Malinauskas expressed confidence in the government’s actions. “This is the right course of action to secure steelmaking in this country,” he asserted, as the state government looks to stabilize the plant and safeguard the long-term future of Australia’s steel industry.
