State and federal governments commit extra $275m to keep Whyalla Steelworks afloat as search continues for new owner

The Premier says Whyalla steelworks’ future is uncertain as he injects another $275m to extend administration – and wouldn’t rule out one key question.

Premier Peter Malinauskas has refused to rule out government ownership of Whyalla steelworks as he drops a further $275m to continue the state-initiated administration.

Insisting he was increasingly confident of finding a private sector owner, Mr Malinauskas nominated September next year as a likely target date.

State and federal governments on Wednesday announced the extra $275m to enable administrator Korda Mentha to extend operations, pay wages and suppliers and upgrade the plant for sale.

A $2.4bn Whyalla rescue package was unveiled in February after the state government ousted tycoon Sanjeev Gupta as steelworks owner and installed KordaMentha as administrator, with $384m funding.

Asked by The Advertiser on Wednesday if he ruled out state or federal governments taking an ownership position in the steelworks, Mr Malinauskas said he could not.

“I’m not in the business of ruling anything out ever, particularly in the modern era. That’s a risky thing to do. But that is certainly not the plan and certainly not our intention,” he said.

“And as things stand today, because of that interest from the private sector, we’re increasingly confident that that’s who will take ownership of the steelworks. But there’s a long way to go.”

Mr Malinauskas has said more than 30 major steel companies from Australia, Japan, India and Korea were among interested parties for the steelworks, which officially hit the sales market on June 24, ahead of formal expressions of interest on August 1.

Citing the 2016-17 steelworks administration that took 18 months, Mr Malinauskas said this would position September next year as a likely time frame.

“We would like it to take around about the same period this time, if not shorter. But I’m not going to guarantee you anything because I can’t,” he said.

“We’ve never been able to guarantee anything from the moment that we intervened to put GFG into administration. We’re in an uncertain future. The only thing I know is that the future is more certain now than what it was before we did that.”

Whyalla Steelworks in June. Picture: Brett Hartwig.

The state government has previously outlined a staged approach to funding the steelworks, provisioning $384m in June’s state budget for paying the administrator beyond its initial six-month period. The funding announced on Wednesday fell short of that by $109m.

Whyalla Steelworks in June. Picture: Brett Hartwig.

Opposition energy spokesman Stephen Patterson said the announcement meant government contributions to the steelworks were “fast approaching $3bn in just six months of administration”.

“Taxpayers will rightly be asking how much more they will be required to pump into the steelworks to keep it afloat,” he said.

KordaMentha welcomed the support, saying this would continue mining and steel production at Whyalla while “we work on finding a new owner for this critical national asset”.