Whyalla steelworks: Hayden Nelson on how Peter Malinauskas became the saviour Sanjeev Gupta couldn’t be

The beers will be flowing at the Eyre Hotel in Whyalla tonight and they’ll be toasting Peter Malinauskas as the man who pulled the steel town from the brink.

But I would like to throw out this controversial opinion.

Perhaps he was just the man who did what Sanjeev Gupta didn’t have the legislative or financial capacity to do — seize the moment.

The steelworks had become a ticking time bomb for both men, Whyalla and the nation’s economy.

One for Sanjeev Gupta, an industrialist, who rode into Whyalla seeking to reignite the town plagued by previous collapses.

And two for a Premier not wanting job losses and the collapse of a steelworks on his hands — staring down an election. I don’t think either man wanted to see Whyalla collapse.

There is so much that has been at stake. Creditors, mostly small to medium sized contractors, are said to be owed somewhere in the vicinity of $300 million dollars.

Hundreds of workers have lost their jobs at the Iron Knob mine, and many contractors have only recently restarted work when the blast furnace came back online.

The Premier on Wednesday said pushing the steelworks into administration was about preserving Australia’s sovereign steelmaking capability — saying operations were on an “irredeemable” path to failure.

The “surgical amendments” give his government the power to do that.

The Whyalla steelworks is the only one of its kind in Australia capable of producing long steel, for the uneducated (like me), the kind that goes into buildings.

The GFG alliance bought the furnace in 2017, having been spun out by BHP and renamed OneSteel in 2000, before going into administration in 2017.

Sanjeev Gupta claims to have invested $200 million into the furnace and just this week, said he’d make $10 million a week once the furnace was operating at capacity.

The only problem is now, that is impossible. It seemed Gupta truly believed he could pay back the monstrosity of debt he owed.

Now he faces a serious challenge to prove that to administrators.

What it really looks like is that his empire is in tatters and the Premier stands tall on the Hummock Hill precipice as a hero.

The question is what happens from here.

Forcing the steelworks into administration will be viewed as a win by locals in Whyalla, Gupta will be characterised as akin to a criminal and taxpayers will likely be the ones forced to fork out to rescue creditors in the short term.

The Government hasn’t yet said who it foresees will run the steelworks in the long term.

At Liv Golf, the Premier was conveniently snapped with the CEO of Bluescope steel.

Somehow I feel we will simply go back to square one.

If the likes of Bluescope or BHP were brought into run the steelworks, it may not bring the 350 jobs back at the Iron Knob mine, and any talk of green steel you can imagine would definitely be on hold.

And there would also be the question of whether Bluescope would be forced to pay the same hefty royalties to the Government, as GFG was supposed to.

I also ask why the Government didn’t just freeze the royalties and work with GFG to pay back the debts to creditors?

The truth is that headline wouldn’t have been popular with voters, but it now leaves the steelworks without a long term commercial backer.

So in the long term, will the government be forced to nationalise the steelworks?

That would mean taxpayers would have to pay back all of the debt, potentially costing them a lot more than it would have if Mr Gupta stayed in charge.

And let’s say Mr Gupta is right, maybe it will be able to generate $10 million in revenue a week and the next owner will turn a profit.

Somehow I feel we will simply go back to square one.

The Federal Government has recently spoken about nationalising REX airlines and now, if I shake my crystal ball, may have to nationalise steel-making. I find this kind of chatter extraordinary.

Anthony Albanese’s party might see this as a win, but I don’t think most voters will, they’ll see it as a cynical step back to the era of protectionism.

In this case Peter Malinauskas had to act and he did and he deserves that beer.

Sanjeev Gupta has been avoiding the media spotlight for months now — perhaps if he had fronted up, he’d avoid this mess.

If he can see a way out maybe he should also opt for the nightcap or maybe putting this to bed is a blessing in disguise.

Hayden Nelson is a reporter for 7NEWS