The South Australian government has taken control of the Whyalla steelworks, forcing it into administration in an effort to secure the site’s future. The GFG Alliance, owned by British steel magnate Sanjeev Gupta, had struggled for months to meet its financial obligations, owing tens of millions of dollars to creditors and the government.
Figure 1: Whyalla steelworks remains in crisis for months. (Credit: ABC News/Che Chorley)
Urgent Action to Secure Whyalla Steelworks
On Wednesday morning, the SA Parliament rushed through changes to the Whyalla Steel Works Act, granting the government the power to intervene. Soon after, Premier Peter Malinauskas announced that the government had appointed restructuring firm KordaMentha as the administrator.
“This is the right course of action to secure steelmaking in this country,” Malinauskas stated. He stressed that the Whyalla steelworks was a critical piece of economic infrastructure and could not remain in its current fragile state.
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Just days earlier, Sanjeev Gupta had promised to sell the company’s stake in a New South Wales coal mine to repay Whyalla creditors. However, Malinauskas revealed that the government’s steel task force had advised them that GFG’s financial position was deteriorating and likely to worsen further.
Whyalla’s Economic Future at Stake
The Whyalla steelworks is the backbone of the local economy, employing around 1,000 workers directly. The facility produces essential steel products for major Australian infrastructure projects.
“The state of the steelworks was going from bad to worse,” Malinauskas said. “It was approaching a point where it would be irredeemable. That is unsatisfactory. That invites government intervention.”
The government placed the steelworks’ operating company, OneSteel Manufacturing Pty Ltd, under administration. KordaMentha will now assess the business, stabilise operations, and explore potential new ownership.
Swift Parliamentary Approval
The move was enabled by amendments to the Whyalla Steel Works Act, which were passed swiftly through both houses of parliament without opposition from the Liberal Party or the crossbench. Energy Minister Tom Koutsantonis introduced the bill in a rare parliamentary procedure that allowed it to be passed without delay.
“I move that standing orders be and remain so far suspended as to enable the introduction of a bill without notice forthwith and the passage through all stages without delay,” he told parliament.
Workers and Contractors to Be Protected
The Whyalla steelworks news has sparked concerns among employees and subcontractors. Malinauskas assured workers that their immediate future is secure, stating that KordaMentha will ensure wages are paid and operations continue.
“For workers employed by OneSteel Manufacturing, that is, workers at the steelworks itself, they will now have their futures assured,” he said.
He added that while new owners might make future staffing decisions, no immediate redundancies were planned. “People working at the steelworks today will be working there tomorrow and into the foreseeable future.”
Contractors who had faced increasing uncertainty will also benefit from the administration process. Malinauskas explained that with full funding in place, outstanding bills would be paid, and business orders could proceed without disruption.
A Strategic Investment, Not a Bailout
The SA government has ruled out financially assisting GFG Alliance directly, stating that the intervention is about protecting Australia’s sovereign steelmaking industry, not rescuing a struggling company.
“This isn’t about GFG, this is about the critical economic infrastructure that is steelmaking production in this country,” Malinauskas said.
Instead, the government is expected to announce a major industry support package on Thursday, aimed at ensuring the long-term sustainability of steel production in Whyalla.
“This is an investment in steelmaking in this country,” Malinauskas said, adding that more details would be revealed during his visit to the town.
Sanjeev Gupta’s Vision Unfulfilled
Sanjeev Gupta purchased the Whyalla steelworks in 2017 for $700 million, promising to transform it into a “green steel” facility. However, critics argue that GFG’s financial troubles have stalled those plans.
“The vision was largely the right one, it just hasn’t been allowed to come to life,” Malinauskas acknowledged.
With GFG Alliance now removed from control, the future of the steelworks depends on the administrator’s ability to secure a new owner and a sustainable path forward.
Federal Government Engagement
The federal government has been closely monitoring the situation. Malinauskas said he had frequent discussions with Prime Minister Anthony Albanese, who had shown strong interest in securing the steelworks’ future.
“The Prime Minister and I, every time we meet in person or speak on the phone, barely an opportunity goes by when I do not speak about the economic opportunities of the Spencer Gulf,” he said.
Opposition Leader Peter Dutton had also been briefed on the developments.
Whyalla Steel’s National Significance
Industry experts warn that the collapse of the Whyalla steelworks could leave Australia dangerously dependent on Chinese steel imports. A report from the McKell Institute stated that the plant is Australia’s only manufacturer of long steel products, which are essential for transport, construction, and manufacturing.
“If Whyalla steel fails, Australia would become dependent on imports for long steel,” McKell CEO Edward Cavanough said. “That would leave us completely exposed to coercion from strategic adversaries.”
Next Steps for Whyalla Steelworks
A meeting between KordaMentha and the steelworks’ creditors will take place within seven days. The creditors will decide whether to continue with the administration process or propose an alternative arrangement.
Meanwhile, discussions are already underway with potential buyers, including Australian steel giant BlueScope Steel. KordaMentha previously managed the administration of Whyalla before GFG Alliance took over in 2017, giving them experience in restructuring the business.
As the Whyalla steelworks enters this new phase, workers, businesses, and the broader industry will be watching closely to see whether the government’s intervention secures a stable and prosperous future for Whyalla and Australia’s steelmaking sector.
