Whyalla steelworks: Simon Birmingham warns against GFG Alliance break-up

SA’s most senior federal Liberal says there are contingency plans in case the Whyalla steelworks operator collapses – and warned against the owner’s break-up.

Finance Minister Simon Birmingham is warning against the break-up of Whyalla steelworks owner GFG Alliance’s Australian assets, as he confirms contingency plans are being prepared in case the company fails.

South Australia’s most senior federal Liberal, Senator Birmingham said the Coalition govern­ment recog­nised the im­port­ance of Australia having a sovereign steelmaking capacity.

He said this goal had prompted direct talks about Whyalla’s future between Prime Minister Scott Morrison and Premier Steven Marshall, as well as talks between GFG chairman Sanjeev Gupta and federal ministers.

“I want to reassure the people of Whyalla, particularly the workforce in Whyalla, to know that governments are monitoring this situation very closely and doing the type of contingency thinking and planning that would be prudent in these sorts of circumstances,” he said.

A NSW Supreme Court action seeking to wind up Tahmoor coal mine, in the NSW Southern Highlands, and GFG’s OneSteel Manufacturing, which operates the Whyalla plant and associated mines, has imperilled more than 1800 SA jobs.

GFG Alliance executive chairman Sanjeev Gupta. Picture: Tait Schmaal

Mr Gupta is fighting the threat, saying he has received “multiple offers of finance” from investment funds.

Senator Birmingham, also the government’s Senate lead­er, told The Advertiser the GFG group had many “very highly connected businesses of different steel operations”.

“I don’t believe it would be in the interests of Whyalla or the nation to see those different assets broken up and sold separately because, as a whole, they provide for a more profitable business,” he said.

Senator Birmingham said the first and foremost goal was for Whyalla to succeed and wished Mr Gupta and GFG success in their refinancing quest.

“They say that they are in an advanced stage of due diligence around some different refinancing proposals, and so hopefully that will proceed smoothly,” he said.

The Advertiser on Wednesday revealed Mr Morrison and Mr Marshall had held talks about government bridging funds to ensure the steelworks’ continued operation if the financing proposals collapsed.

Prime Minister Scott Morrison (centre) in Adelaide with federal Finance Minister Simon Birmingham and Premier Steven Marshall. Picture: NCA NewsWire / Dean Martin

State Energy and Mining Minister Dan van Holst Pellekaan met community leaders, steelworks boss Jason Schell and workers in Whyalla on Thursday, saying there was much optimism about the company’s future.

“In the past 12 months in particular, the steelworks has become a more efficient and profitable business,” he said.

Mr van Holst Pellekaan said no government backing was required at present, as Mr Gupta was confident of securing replacement finance.

“We’re in a much stronger position today facing the challenges we currently face than we were five years ago,” he said.