February 27, 2025
Whyalla Steelworks has entered administration again, barely eight years after previous owner Arrium collapsed. The South Australian and Federal Governments have stepped in with a $2.4 billion investment to upgrade the site and make it fit for a future owner.
The Steelworks is owned by billionaire Sanjeev Gupta’s GFG Alliance, which also owns Tahmoor Colliery in the NSW Illawarra and Liberty Bell Bay in Tasmania where MEU members are employed.
The GFG Alliance had a disastrous 2024. But what exactly happened?
The Steelworks, owned by billionaire Sanjeev Gupta’s GFG Alliance, had a disastrous 2024. It’s ageing blast furnace was out of action for about four months between March and July (with workers copping pay cuts) and then again for another four months from September to allow for repairs, losing about $1 million for each day out of action and shedding almost 50 workers. After restarting in January, the furnace remains at half capacity.
On top of tens of millions of dollars in royalties owed to the South Australian Government, GFG is in debt to numerous local contractors and suppliers that it failed to pay, including rail freight operator Aurizon. Last year, more than 150 jobs at GFG’s iron ore mining operations on the Eyre Peninsula were cut, and its Iron Knob mine was set to be put into care and maintenance, placing at least 350 jobs on the line.
But GFG’s global troubles had already begun to bite in 2021, when it’s main lender Greensill entered insolvency. GFG continues to owe it hundreds of millions of dollars some four years after Greensill’s collapse. In 2022, the UK’s Serious Fraud Office searched properties linked to Gupta to obtain company balance sheets, reports, and correspondence as part of investigations into suspected fraud, fraudulent trading, and money laundering, though the company denied any wrongdoing. Across Europe, Gupta’s steel plants are in crisis, with several blast furnaces idled, thousands of workers stood down, and insolvency proceedings afoot.
In an uncertain world, local steel manufacturing capacity is critical to national security and supply chains. And, in Whyalla, a regional economy and community will be the ones bearing the brunt of an industrial downturn. That’s why state and federal governments have acted. The South Australian Government placed the steelworks into administration, with GFG no longer running the plant or its associated iron ore mines. A joint state and federal government $2.4 billion package designed to prepare the steelworks for the future was then unveiled, supporting local businesses owed money, infrastructure upgrades, and funding to support a new operator into the future.
There are now also calls for clarity on behalf of workers and the community at GFG’s Liberty Bell Bay facility in Tasmania, which is a key supplier to Whyalla but also a separate business entity. MEU members at Liberty Bell Bay face uncertainty and are nervous about the future, ahead of expected updates next week.
While MEU members at Tahmoor mine have not supplied the steelworks with metallurgical coal since its coke ovens were switched off in 2023, they too have been caught up in the fallout. Owned by GFG subsidiary SIMEC, it is a profitable mine with solid fundamentals, and a strong export customer base.
But earlier this month, operations halted due to failure to pay suppliers, with most workers asked to stay home for four weeks on full pay.
GFG’s moves to sell the mine reflect Gupta’s urgent desire for cash, but Tahmoor members will no doubt look forward to more stable ownership once a buyer is secured. The MEU is optimistic the mine will find a reputable owner to operate the mine reliably and safely.