Anthony Albanese flies into Whyalla and announces $2.4bn Whyalla rescue package details

The prime minister and premier have both fronted the cameras in Whyalla to reveal the key details of their $2.4 billion plan to rescue SA’s Steel City. See where the money will go.

• $2bn Whyalla rescue package

Prime Minister Anthony Albanese has unveiled details around a $2.4bn rescue package for Whyalla Steelworks, with a focus on paying creditors, making plant upgrades and cordoning off a huge chunk of funding to support a new owner.

The rescue funding is expected to roll out in three parts, the most immediate $100m including $50m for creditor assistance payment, $32.6m for infrastructure upgrades and $6m for a jobs and skills hub, Mr Albanese said in Whyalla.

Another $384m of state and federal funds was expected to then support the Whyalla Steelworks operate in administration and to ensure workers and contractors get work and pay.

Mr Albanese said the third pot of $1.9bn would be used to “work with a new owner to invest in the upgrades and new infrastructure” to ensure the steelworks has a sustainable, long-term future.

He also announced a Green Iron fund would boost green iron manufacturing and supply chains, the Prime Minister saying a joint taskforce would be established to engage with the City of Whyalla, administrators, workers and creditors to provide expertise in mapping a sustainable future.

“My government is building Australia’s future. And to do that, we need Whyalla steel,” he said.

“Whyalla steel has forged some of our country’s biggest projects – rail lines, airports and stadiums.

“That’s why today in partnership with the Malinauskas Government, we are delivering more than $2 billion to ensure the future of the steelworks and support local jobs.”

Up to $500 million of federal funds has been earmarked for the Green Iron Investment Fund to support the longer term transformation of the steelworks.

The state government’s contribution to the package comes from $593m set aside for its long-spruiked flagship Hydrogen Jobs Plan and another $50 million that has been on the table for eight years under the Whyalla Steelworks Operational Efficiency Improvements Fund.

Latest announcements follow the South Australian government yesterday taking extraordinary action to rush new legislation through parliament that put the Whyalla Steelworks in administration, the government appointing KordaMentha as administrator.

Mr Malinauskas said now the steelworks was no longer under the control of GFG, the state and federal governments could make long-term investments to secure the future of Whyalla and Australian steel making.

“Locally-made steel is vital to South Australia and Australia’s future, and this unprecedented investment recognises the importance of the Whyalla Steelworks,” he said.

“I was never going to allow a taxpayer-funded bailout of GFG.

“We are stepping up to provide immediate on the ground assistance for local workers and businesses, we are stabilising the steelworks and we are setting the steelworks up for long-term prosperity.”

Prime Minister Anthony Albanese has flown to Whyalla to announce a rescue package. Picture: NewsWire / Gaye Gerard

Ahead of that announcement, SA Premier Peter Malinauskas told Thursday morning radio that the state government had abandoned immediate plans to deliver its long-publicised hydrogen power plant in the wake of the move to force the Whyalla steelworks into administration.

Mr Malinauskas confirmed to reporters that the state government-funded Office of Hydrogen Power would not be shut down because “there is a future for that”.

However he said it would be “curtailed and wound back”.

“There’s no point in producing hydrogen if there’s not a customer for that,” Mr Malinauskas said.

The rescue package announcement comes after Sanjeev Gupta’s GFG Alliance was spectacularly ousted from the steelworks on Wednesday.

Premier Peter Malinauskas at Hummock Hill Lookout, overlooking Whyalla Steelworks. Picture: Brett Hartwig

Sanjeev Gupta, executive chairman of Whyalla steelworks operator GFG Alliance, which was ousted in a bombshell move. Picture: Ben Stansall/AFP

Mr Albanese, speaking exclusively to The Advertiser on Wednesday, said the federal and state governments would work together to “save the Whyalla steelworks and back local jobs”.

In the bombshell move on Wednesday to take control and install administrator KordaMentha, legislation was rushed through state parliament that meant the government could send GFG subsidiary OneSteel Manufacturing into administration and guarantee ongoing payment to workers and creditors.

Whyalla Mayor Phill Stone said he received a “courtesy call” from Premier Peter Malinauskas on Wednesday about the steelworks going into administration “just before it went public”.

“I could feel … they were getting very, very close. But the speed actually took me by surprise,” he said.

“I can now see why they had to keep it as quiet as possible to make sure it would go through.

“There is a guaranteed future now. People are going to be paid.”

Asked what his message was for Sanjeev Gupta, Mr Stone said: “I hope he has better luck with businesses elsewhere”.

South Australian Business Chamber CEO Andrew Kay welcomed the rescue package announcement.

“The events of the past 24 hours have been a necessary step to find a way forward for the Whyalla steelworks, its employees and the many small businesses impacted,” Mr Kay said. “We have been hearing troubling stories from local businesses for many months now and it had become clear that government intervention was essential.”

“We are pleased to see the commitment in the package to assist operators who are owed significant amounts by GFG, many of whom have been forced to pay their creditors out of their own pockets,” he said.

“It is now imperative that the plant is restored to full working order and a sustainable ownership and operational solution is found to lock in long-term security for the people of Whyalla, and to deliver on the promise for steelmaking in Australia.”