The Australian government has pledged $1.5 billion to support the South Australia steelworks, recently taken over from Sanjeev Gupta’s GFG Alliance. This move is part of a significant effort to rejuvenate the nation’s manufacturing sector. The investment in Whyalla, a remote town nearly 400 kilometers north of Adelaide, comes ahead of an impending election, ensuring a comparison of Labor’s industrial initiatives and renewable energy goals against the opposition Liberal party’s proposals for adopting nuclear power and reducing public expenditure.
The South Australia state government amended legislation to assume control of the GFG Alliance-owned steelworks, placing it into administration, citing the facility’s financial challenges and inadequate investment from GFG as reasons for the takeover. Australian Prime Minister Anthony Albanese visited Whyalla to announce a financial package designed to sustain the steel mill’s operations through the administration period. This package aims to transform the facility under new ownership to produce “green steel,” which lowers carbon emissions during production.
The steelworks directly employs 1,100 individuals and engages another 2,000 as suppliers. The financial support will protect these jobs during the administration and clear overdue debts to local businesses. Albanese highlighted the importance of broadening Australia’s industrial base, emphasizing the Whyalla mill’s role in supplying 75 percent of the country’s structural steel, as a cornerstone of his strategy to support “blue-collar jobs.”
Mark Kenny, from Australian National University’s Australian Studies Institute, suggested the decisive actions by the state and federal Labor governments would likely be positively perceived before the election. He noted a global shift in social attitudes, where people seek active governmental intervention to address industrial issues.
Meanwhile, Sanjeev Gupta announced that GFG Alliance is seeking legal counsel following the government’s “unexpected and unprecedented” action. He criticized this decision, believing it negatively impacts Whyalla’s creditors, employees, and the community. Gupta stated that GFG had invested A$1.5 billion in Whyalla since acquiring it in 2017, and that the focus would now shift to other assets, eliminating the need to cover these losses. He also clarified that other GFG companies constitute the majority of creditors for OneSteel Manufacturing, the entity placed into administration, and assured that other Australian and international assets, including the InfraBuild steel recycling business, a coal mine in New South Wales, and a smelter in Tasmania, remain unaffected.
