Government officials have made a bold move to take control of one of Australia’s only steelwork operations, citing the plant’s financial troubles as a major risk to Australia’s steel industry.
South Australia Premier Peter Malinauskas said the decision follows months of uncertainty as the steelworks’ owner, British billionaire Sanjeev Gupta’s GFG Alliance, struggled to pay its debts, including those owed to local subcontractors and the SA government.
“We have received advice that the steelworks is being run into ground to the extent that it may become irredeemable,” he said.
“Importantly, it’s not just the Steelworks itself – it’s a vast number of local suppliers, small businesses owned and operated by South Australians, whose debts remain unpaid, whose revenue has evaporated, and whose livelihoods are at stake.”
The government’s intervention, which forced the steelworks into administration, comes after urgent legislation passed both houses of state parliament, allowing it to act.
Malinauskas didn’t mince words about the gravity of the situation, saying, “For months, my government has been carefully planning a strategy to address the challenges unfolding at the Whyalla Steelworks… GFG is no longer running the Whyalla Steelworks and associated mines.”
The administration process will now stabilise the business while potential new owners are explored.
Why Whyalla steel matters for construction and beyond
In light of the news, a report from the McKell Institute’s SA branch has been released highlighting just how crucial the Whyalla Steelworks is for Australia’s construction, transport, and defence sectors.
The key finding? Without it, the country would become dangerously dependent on Chinese steel imports, potentially driving up the price of yet another essential construction material.
The report reveals:
- Whyalla is Australia’s only producer of long steel, essential for building infrastructure, roads, bridges, and housing.
- 40 per cent of Australia’s long steel was imported from China in 2024, up from 28 per cent in 2013.
- Losing Whyalla would leave Australia without the ability to produce long steel, making the country more vulnerable to global supply chain disruptions and foreign influence.
CEO Ed Cavanough didn’t hold back, stating, “If Whyalla Steel fails, Australia would become dependent on imports for long steel. That would leave us completely exposed to coercion from strategic adversaries.”
“We had a taste of what this looks like in 2021, when the Chinese Government imposed tariffs and trade restrictions on key Australian export sectors.”
Cavanough also stressed that Whyalla is simply too important to be left in the hands of a struggling private owner.
“The crucial fact is that the Whyalla steelworks are far too important to the national interest to be left to the whims of a very capricious private owner.”
Workers’ union demands action to secure jobs
The Australian Workers’ Union (AWU) has come out in full support of the government’s intervention, calling for swift action to protect thousands of jobs and ensure the long-term viability of the plant.
AWU National Secretary Paul Farrow made it clear what’s at stake:
“Without immediate action, Australia loses a critical sovereign capability relied on by its construction, infrastructure, and manufacturing industries. It jeopardises many thousands of jobs – on-site and up and down supply chains.”
Farrow also pointed out that Whyalla represents a “generational opportunity to reindustrialise and lead the world in green iron and steel production.”
“Tens of thousands of households rely on the steelworks and any disruption would be an absolute disaster,” he added.
“Long-term, Australia’s economic sovereignty hinges on the Whyalla steelworks remaining operational. Without Whyalla we will be forced to rely on China for long steel. That would be catastrophic.”
The AWU claims to now be working closely with the South Australian and federal governments to secure the future of the steelworks.
What’s next for Whyalla?
For now, the steelworks is under administration, with financial advisory firm KordaMentha taking over operations. Premier Malinauskas reassured workers that “During the administration, workers and contractors will continue to do their job and will be paid with the benefit of a government guarantee.”
The next step is finding a new owner and securing investment to transition the plant towards greener steel production.
This morning, Prime Minister Anthony Albanese even took to the airwaves to pledge up to $2 billion dollars of federal government funds to keep Whyalla’s doors open, which he labelled an “enormous” opportunity for Australia in green steel manufacturing.
“Producing steel is something that’s a requirement, it’s not like we can just make it disappear. And the potential there as well for green iron in the future is so important and there’s great prospects,” the prime minister told Adelaide radio.
“There’s a real national interest here,” Albanese said in a separate radio interview. “Railways, bridges, schools, hospitals, high-rise towers, all of these things – defence assets – depend upon the Whyalla steelworks.
“So, it’s absolutely critical, but as well, the opportunity that is there for green steel manufacturing is enormous and that will be increasingly lucrative as the world seeks to decarbonise.”
While this saga is far from over, one thing is clear—Whyalla’s future is a matter of national interest, and for the construction industry, keeping the steelworks running is absolutely essential.
