The South Australian government has pushed the owners of the troubled Whyalla steelworks into administration following an emergency meeting this morning.
Legislation was rushed through the parliament to amend the Whyalla Steel Works Bill to allow the state government rights to enter the steelworks, access to the accounts and a first charge over debts owed to the government.
KordaMentha has been appointed the administrator of OneSteel Manufacturing, which owns and operates the Whyalla steelworks and is part of the GFG corporate group.
Premier Peter Malinauskas said the decision came after the government lost confidence in GFG to pay its bills and secure funding needed for the ongoing operation of the steelworks.
“We take this action very conscious of its significance… we do so with absolute confidence and clarity that this is the right course of action to secure steelmaking in this country,” he said at a press conference this afternoon.
“It is unacceptable for such an important critical piece of economic infrastructure for the nation to be in a situation where its ongoing operations are so severely compromised, as we believe was the case prior to today.”
Last month, the state government revealed GFG owed the government tens of millions of unpaid royalties while SA Water was owed about $15 million.
GFG chair Sanjeev Gupta recently announced he would sell his Tahmoor Coking Coal Mine to help pay off his debts in Whyalla.
Malinauskas said the government was advised Gupta’s deteriorating financial position would only continue to deteriorate and compromise the operations of the steelworks.
“Given the state of the steelworks was going from bad to worse and the finances of its owner were compromised … it was approaching a point where it would be irredeemable. That is unsatisfactory. That invites government intervention,” he said.
Malinauskas stressed the action was not a bailout for Gupta or GFG but about the “critical economic infrastructure that is steelmaking production in this country”.
Whyalla is one of two steelworks in Australia and produces 75 per cent of the country’s structural steel.
It is the only domestic producer of steel long products.
Malinauskas will be travelling to Whyalla to speak with affected workers and will tomorrow announce the details of the “most comprehensive industry support packages that this nation has ever seen”.
“For the people of Whyalla, it means they are in a far better position right now than they were this morning,” he said.
“Workers in Whyalla have faced ongoing uncertainty now four months, arguably longer than that.
“We have seen workers been made redundant, particularly at the mine.
“The administrator will stabilise the business and seek to stop that from occurring.”
