Whyalla steelworks: Albanese and Malinauskas promise billions of dollars to rescue steelworks, save 1000s of jobs

Billions will be poured into the Whyalla steelworks as part of a rescue package, in a bid to save thousands of jobs.

Prime Minister Anthony Albanese and South Australian Premier Peter Malinauskas will on Thursday visit the city to announce as much as $2 billion in funding, one day after the crisis-hit GFG Alliance was ousted.

The state government rushed legislation through the parliament on Wednesday, giving it authority to act on debts owed by GFG to secure the steelwork’s future operations.

Mr Albanese said Whyalla was critical to sovereign steel, while pitching the lifeline as a potential driver of green production.

“There’s a real national interest here ... 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,” he told Adelaide’s Five AA radio on Thursday.

GFG’s owner, UK billionaire Sanjeev Gupta, said the state was on the “wrong course” in forcing the operation into administration and he was seeking legal advice, according to an internal company memo obtained by The Australian Financial Review.

“This news will be disappointing to us all, not least to me personally, given the huge efforts we have all put in to save Whyalla in 2017 when it was losing $1 million a day, return operations in 2024 after a near-death experience, and promote Whyalla’s magnetite potential to a global audience,” Mr Gupta reportedly said.

Mr Malinauskas said the nation needed to produce steel for itself or it would be relying on other countries for supply.

The premier said the federal government had been kept up to date with the situation surrounding the steelworks as the crisis ramped up in recent weeks.

“It’s not a thing we do lightly,” he told Nine on Thursday, referring to the administration action.

“It’s important for the nation ... So much of the steel that we use, and everything in Australia, is made at the plant ... and these people need security and stability.”

GFG has been under intense pressure from the government to pay debts to creditors of the steelworks and the state, which is owed “tens of millions of dollars”, including $15 million to SA Water.

Mr Malinauskas said administrator KordaMentha would explore a possible sale of the business.

The federal opposition said it supported the SA government’s decision to place the steelworks into administration and is awaiting details of the support package.

The move comes after months of uncertainty at the steelworks and reassurances from its chairman.

Mr Gupta on Friday said a debt settlement deal had been reached with creditors of global financier Greensill Capital, which had advanced billions of dollars in credit to GFG before collapsing in 2021.

He later said the steelworks was turning over $13 million to $14 million a week and hoped it would break even by mid-year.