Whyalla residents on edge as future of GFG Steelworks in doubt

The economic climate in the Steel City has residents fearing for their futures should GFG Alliance’s embattled Whyalla steelworks be placed in voluntary administration.

There was so positivity about Whyalla’s future when white knight Sanjeev Gupta rode into town and laid out his grand plans that were supposed to bring an economic renaissance.

There was more buzz around the state government’s plans to make it the green hydrogen capital of the country.

But now that the steelworks’ furnace is offline for a second time this year, and the government is seeking advice on what to do if it is plunged into administration, a pall of uncertainty once again hangs over the Steel City.

GFG revealed last week that its Whyalla operations as a whole had fallen to a loss making position after two previous years of profit, and the company has been laying off staff both among its white collar ranks and at the mines in the Middleback Ranges.

Local business owner Tom Antonio is demanding the government make public its contingency plan for the steelworks, describing the economic climate in the city as “diabolical”.

The Electrical Discounters owner and resident of 47 years said the uncertainty around the GFG plant’s future, and recent job losses, had forced people to either leave town or dramatically cut back on spending outside the cost of living crisis.

“It’s pretty diabolical at the moment – a lot of people have lost a lot of money,” he said.

“This is the worst I’ve seen it and I’m a very positive person – I’m not a pessimist by any stretch of the imagination.

“But something had to happen and we have to bring these people to account.”

Owner of Electrical Discounters Tom Antonio at Whyalla Town Centre. Picture: Ben Clark

Mr Antonio said a recent public forum drew about 150 residents, all concerned about job security and the town’s future if the blast furnace never comes back online.

He said there was a belief in the town the furnace would never fire again, which he feared would result in more people leaving.

A former steelworks contractor, who spoke to The Advertiser on the condition of anonymity, said he was moving his family to Adelaide after he managed to secure another job in the capital.

It has meant leaving the town he has lived in for more than 30 years, and where he raised his children, sooner than originally planned.

“It’s tough, but Whyalla has been through this before,” he said. “I think it will come back, but so many people just don’t know.”

Mr Antonio said he was offended by politicians saying Whyalla residents needed to be positive about the town’s future, saying those who lived there only wanted to see it succeed.

“We want to make sure we have jobs, not only for us but for our kids and our futures,” he said.

“We want to live here because we love Whyalla.

“We need to get a new furnace and we need to get it as quickly as possible.”

Premier Peter Malinauskas (Right) in Whyalla in February. Picture: Ben Clark

Mayor Phill Stone said he had been briefed by GFG on Wednesday and he had been assured the blast furnace would come back online.

“Yes, they’ve got ongoing issues,” he said. “It is going to be down for a little while but they are cranking it up.

“It is just a slow process getting it back up to strength.

“They’re having a degree of success that they’re happy with but it is still going to take time.”

Mr Stone said he believed the state government was fulfilling its due diligence “looking at all scenarios if something goes wrong” regarding the long-term viability of the steelworks.

“There is certainly no talk (here) at this stage of voluntary administration,” he said.

“Yes, GFG or Liberty Metals – the company that operates on behalf of GFG – they do have global issues at the moment because the steel industry globally is in a mess.

“Irrespective of the blast furnace problems here, the fact that China has its own economic issues at the moment and are shipping off as much steel as possible as they can into Asia (means) our market here is suffering because of the global issue.”

The steelworks were previously placed in administration in 2016, when former owner Arriumcollapsed.

Mr Stone said he could understand the anxiety in the community, especially around the lack of progress on the long-promised but not-yet delivered hydrogen projects.

“You look at something that is about to be the first of its kind, you do not go to Ikea and buy it off the shelf,” he said.

“Middle to late next year will be the peak of construction (for the hydrogen plant).”

And new local business owner Alex Perri said he was optimistic of the town’s future.

He bought the Whisk Away cafe in May, extended its trading to six days a week and opened later at night, and has already seen an increase in patronage.

“We do a lot of lunch trade, a lot of workers – we haven’t noticed a downturn or a difference in business,” he said. “If anything, we have noticed a little bit of a swing from dine-in to more takeaway.”

Carbon-neutral synthetic fuel producer Zero Petroleum – headed up by former McLaren racing technical director Paddy Lowe – last week toured Whyalla in an early fact-seeking tour on how it could leverage off the hydrogen plant’s infrastructure.

The company, which makes fuel from air and water, or carbon dioxide and hydrogen, has entered into a Memorandum of Understanding with the state government about its potential future in South Australia – including in Whyalla.

“The government of South Australia has transformed the region into a global hub of renewable solar and wind power development, and its transition to a thriving green hydrogen economy is a genuinely exciting prospect for us,” he said.

The company has until 2026 to explore the opportunities, but many fear that would be too long.

One resident who spoke to The Advertiser said her husband was forced to work drive-in drive-out to Carrapateena mine after losing his job at the steelworks.

She said her husband, a contractor, still had job security but it was not “ideal” for the family.

Mr Stone said he could understand the anxiety in the community, especially around the lack of progress on the long-promised but not-yet delivered hydrogen projects.

“You look at something that is about to be the first of its kind, you do not go to Ikea and buy it off the shelf,” he said.

“Yes, we have a lot of scepticism in Whyalla because over the years, there have been big announcements and promises, and they don’t eventuate.

“But to create something like this, to do the planning and have it started within 12 months, in my very naive outlook on life, is an incredible task.”

Mr Gupta is understood to have briefly jetted in to Whyalla on Friday, before leaving soon after.

The one-time white knight of the steel town, who promised billions of dollars worth of projects when he bought the steelworks out of administration in 2017, and which he has failed to deliver, last week in an editorial published by News Corp Australia said that Whyalla was his highest priority.

The Whyalla operations were previously placed in administration on April 7, 2016, when their former owned, ASX-listed company Arrium, itself collapsed into administration.