Commonwealth, SA pledge $2.4b to save Whyalla steelworks
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The news: Federal Labor will team up with the SA government to provide almost $2.4 billion in a bid to save the embattled Whyalla steelworks.
The numbers: The steelworks, which directly employs more than 1000 people and produces three quarters of Australian structural steel, was placed in administration by the SA government on Wednesday. Its previous owner, GFG Alliance, had accrued more than $300 million in debt.
On Thursday, Prime Minister Anthony Albanese joined SA Premier Peter Malinauskas at the site to unveil a $1.9 billion joint package will go towards working with the site’s future owners, in a bid to ensure it has a “sustainable, long-term future”.
The package will come with an additional $100 million for what the government called “immediate, on-the-ground support” to prop up the steelworks, including creditor assistance payments and infrastructure upgrades.
Another $384 million will be allocated to fund it during administration, to ensure workers and contractors have ongoing work and will continue to be paid.
The funding will be split between the Commonwealth and state governments.
The context: Malinauskas said the package was not a bailout for British billionaire Sanjeev Gupta, whose family owns GFG Alliance, but would “support the businesses on the ground who have done nothing wrong”. Gupta’s debts “are his debts to be accounted for”, Malinauskas said.
Asked whether they would rule out nationalising the plant, both leaders insisted it presented a major opportunity for prospective owners.
The federal government also concurrently announced a green iron fund, earmarking $500 million for the transformation of Australia’s steel industry in the long term.
The industry has been under increased focus in recent weeks as the federal government works to avert a 25% tariff imposed by US President Donald Trump on steel imports from all countries. Trump has given mixed signals on whether Australia will be granted an exemption from the tariffs, which are set to come into effect in mid-March.
Whyalla steelworks is located in the federal electorate of Grey, which is comfortably held by outgoing Liberal MP Rowan Ramsey.
What they said: “The previous government … said that Whyalla would be wiped off the map if we actually took action. Of course, none of that occurred. We want Whyalla not just to survive, but to thrive and grow, and that is very possible with the vision that I share with [Premier Malinauskas],” Albanese told reporters.
The source: Commonwealth and SA government joint press release
