Sale process for the Whyalla Steelworks begins

The federal government and the South Australian Government have jointly announced that the sale process for the Whyalla Steelworks and associated mining operations has formally opened.

The independent process, led by administrator KordaMentha and sale advisors 333 Capital, aims to secure a long-term, sustainable future for steelmaking in Whyalla, after the state government intervened to put the steelworks into administration in February. Much work and initial capital has been expended rectifying an extended period of underinvestment by GFG, with KordaMentha ensuring the plant is fully compliant and represents a clear investible proposition for potential purchasers.

With a strong early interest from global steelmakers and consortia looking to expand into low-emission steel production, selected prospective buyers have now been granted access to a secure data room — enabling initial due diligence and allowing parties to prepare non-binding indicative offers as part of a phased approach to the sale.

The Australian and South Australian Governments have jointly committed $1.9 billion in funding to support a transformation of the operations into a commercially viable, low-emissions, ‘pit to port’ iron and steel facility — part of a broader $2.4 billion assistance and transformation package underpinning long-term jobs and economic resilience for Whyalla and the Upper Spencer Gulf.

A range of prospective buyers have already expressed interest in acquiring and transforming the integrated operations.

KordaMentha continues to stabilise and enhance operations, with an additional 75 new employees now added across core areas of the steelworks, including blast furnace operations, steelmaking and finishing. Recruitment is ongoing for further new roles, including in mobile maintenance and diesel mechanics.

As part of the assistance package, 61 South Australian businesses that were owed money by GFG — many of them in Whyalla — have now received more than $15 million through the Business Creditor Assistance Scheme to support their continued operation.

Small businesses in Whyalla have also received much-needed support, with $570,000 in grants awarded to 57 businesses that had experienced a reduction in revenue due to the decline in activity at the steelworks.

“Australia’s steel industry is critical to the Australian economy and the community of Whyalla,” said federal Minister for Industry and Innovation Tim Ayres. “Through the Future Made in Australia agenda, the Australian Government wants to ensure steelmaking capacity remains here onshore. There is real opportunity to manufacture iron and steel using Australia’s abundant ore and renewable energy to set up this industry and the Whyalla steelworks for the decades to come.”

“Whyalla has long been at the heart of South Australia’s industrial strength — and now it has the potential to deliver sovereign steelmaking for the long term,” said Premier of South Australia Peter Malinauskas. “Only a few months ago, GFG was laying off workers and dozens of small businesses were doing the same, because they weren’t being paid.

“Now, thanks to our decisive action to place GFG in administration, and the $2.4 billion Sovereign Steel package, the steelworks is putting on staff, and suppliers and contractors are in a much better position for the future."

Image credit: iStock.com/Photon-Photos