SA Government enlists BlueScope chiefs alongside KordaMentha as Sanjeev Gupta’s OneSteel is dramatically ousted from Whyalla steelworks

Some of the biggest movers and shakers in the country are making a beeline for Whyalla in the wake of the SA government’s bombshell move on Sanjeev Gupta’s OneSteel.

• Read the Premier’s full statement

A GFG Alliance spokesperson has responded to the South Australia Government’s bombshell move to oust its subsidiary OneSteel as operator of the Whyalla steelworks.

They moved to first distance its separate company InfraBuild that integrates scrap metal recycling and steel manufacturing from the unfolding controversy.

“GFG is assessing what this means and is seeking advice on its options. Our concern is first and foremost the wellbeing and safety of our employees,” the spokesperson said.

“InfraBuild is a separate company from One Steel Manufacturing Pty Ltd (Whyalla Steelworks).

“Its supply chain is resilient, in addition to its own domestic high quality production facilities it has regular supply from mature international suppliers.”

A BlueScope spokesperson said “BlueScope has a longstanding relationship with the Whyalla steelworks and we know its people and operations well”.

“We also believe the Whyalla steelworks provides important sovereign capability for the nation,” the spokesperson said.

“BlueScope stands ready to provide technical and operational support for the Whyalla Steelworks, as it has previously, should it be required.”

BlueScope bosses drafted as Prime Minister heads for Whyalla

Managers from Australian-owned steel giant BlueScope will be enlisted as special advisers to the administrators taking over the Whyalla steelworks, Premier Malinauskas has told parliament.

It comes as Prime Minister Anthony Albanese prepares to fly to Whyalla on Thursday to join Mr Malinauskas in unveiling a funding package expected to deliver upgrades that will enable green steel production.

BlueScope is currently the only other steelmaker in Australia, operating from Port Kembla in NSW, and the Premier said its chief executive had been a guest at LIV Golf on the weekend along with other creditors.

“I'm very appreciative of the relationship we have and the interest they have in the steelworks,” Mr Malinauskas said.

Energy Minister Tom Koutsantonis told Question Time the steelworks would continue to operate “if anyone attempts to close steelmaking in Whyalla they will be in breach of the indenture. The administration is fully funded.”

BlueScope managing director and CEO Mark Vassella with Premier Peter Malinauskas at LIV Golf on Sunday. Picture: The Advertiser

Mr Koutsantonis said Whyalla’s port was not controlled by OneSteel and he believed that once new plans were in place “the port should flow freely”.

Answering questions about how contractors were reacting to the news, Mr Koutsantonis said he had not heard of contractors removing infrastructure from the plant.

“I hope that the workers at Whyalla do all they can to protect the blast furnace until the administrator is on site.

“I think what you are going to be seeing in Whyalla now is a lot of activity really, really quickly including a lot of maintenance that has not been done.”

Mr Malinauskas said the government’s decision to put GFG into administration placed workers, creditors and contractors in an “infinitely better position than they were in this morning”.

“This afternoon a contractor will be paid for work they do,” he said.

“A worker going tonight to their shift at the Steelworks knows they will not wake up tomorrow to find out they’ve been redundant”

“Administration provides certainty, it provides clarity, it provides payment and it provides work”

In Question Time, Premier Peter Malinauskas equated criticism of the government’s decision to place GFG Alliance into administration as voicing support for GFG and its continued operations of the Whyalla Steelworks.

Opposition leader Vincent Tarzia called on Mr Malinauskas to guarantee that no worker would lose their job through the administration.

KordaMentha said on Wednesday afternoon that partners Mark Mentha, Michael Korda and Lara Wiggins has been appointed by the state government.

Mr Mentha said the firm intended to keep the steelworks and mining operations going during the administration period.

“This will preserve around 4000 direct and indirect jobs, as well as support local businesses in the Whyalla community and the nation’s steel industry.”

The Premier leaves an emergency meeting at Old Parliament House. Picture: Dean Martin

Politicians leaving an emergency meeting at Old Parliament House. Picture: Dean Martin

Sanjeev Gupta gone as Whyalla steelworks boss

Sanjeev Gupta’s GFG Alliance was spectacularly ousted as Whyalla steelworks operator on Wednesday morning in a bombshell state government move to seize control, install administrator KordaMentha, pay creditors and seek a new owner.

In a series of unprecedented high-stakes moves on Wednesday morning, extraordinary legislation was rushed through state parliament to enable the government to plunge GFG subsidiary OneSteel Manufacturing into administration and guarantee ongoing payment of workers and creditors.

Notices were officially served on GFG throughout the morning at offices across the country.

OneSteel is the legal entity that owns and operates the Whyalla steelworks and associated mines.

Premier Peter Malinauskas said GFG had been given every opportunity to make good on its promises to pay creditors as his government for months had “been carefully planning a strategy to address the challenges unfolding at the Whyalla steelworks”.

“It has failed to do so. So today, we have acted. GFG is no longer running the Whyalla Steelworks and associated mines,” he said.

“The South Australian Government has intervened. The steelworks is now in the hands of an administrator, who will stabilise operations and explore a possible sale to a new owner.

“Importantly, it’s not just the Steelworks itself – it’s a vast number of local suppliers, small businesses owned and operated by South Australians, whose debts remain unpaid, whose revenue has evaporated, and whose livelihoods are at stake.

“This is a significant step, and one we do not take lightly. But it is a necessary one to secure the long-term future of Whyalla.”

“We couldn’t have GFG holding back steelmaking in this country.”

The government is vowing to take “early and proactive steps” to secure a new owner, along with the administrator, in a way that keeps the mining and steelworks assets together and the steelworks operational.

On Wednesday afternoon, Australian Steel Products – BlueScope Steel chief executive Tania Archibald said BlueScope was ready to provide technical and operational support to the Whyalla Steelworks.

“BlueScope has a longstanding relationship with the Whyalla Steelworks and we know its people and operations well,” Ms Archibald said.

Sanjeev Gupta has since spoken out on his plans to break even by mid-year. Picture Mark Brake

Mr Malinauskas said the state government had received advice that the steelworks was being “run into the ground to the extent that it may become irredeemable”.

He vowed workers and contractors would continue to do their jobs and be paid “with the benefit of a government guarantee” during the administration.

“Only an intervention of this nature will protect the steelworks and its creditors,” he said.

Mr Malinauskas praised KordaMentha’s track record of “ably operating the Whyalla steelworks” during the previous administration almost a decade ago, that handed ownership to Mr Gupta’s firm.

The Premier said he would travel to Whyalla later on Wednesday, promising to make further announcements about his government’s “steadfast commitment” to support the city and “deliver the industrial transformation required to realise the economic opportunity in the Upper Spencer Gulf”.

Mr Malinauskas, who said he had kept Prime Minister Anthony Albanese “fully abreast of the situation”, vowed to unveil on Thursday a detailed package to secure Australian sovereign steelmaking capacity at Whyalla and how the administrator was “fully funded”.

Asked by The Advertiser how long the administrator was “fully funded” and when he expected a new owner might be found, Mr Malinauskas did not directly answer but pointed to the KordaMentha’s 18-month administration of the steelworks in 2016 and 2017.

Asked about the government’s $593m Whyalla hydrogen power plant, Mr Malinauskas signalled that this plan remained alive but had effectively been postponed.

“We absolutely believe as a government that hydrogen will have a role to play in the decarbonisation of steel in the future. It is the way to do it,” he said.

Energy and Mining Minister Tom Koutsantonis said since the 2017-18 financial year Mr Gupta’s company had seen iron ore sales values totalling $7.825bn from their South Australian operations, while since 2019/20 total steel sales had amounted to $4.8bn.

“In the same period, we have seen nearly $800 million sent offshore including repayments arising from the Greensill collapse, payments of intercompany loans within the GFG group and funding towards the purchase of the Liberty South Korea business,” Mr Koutsantonis said.

“This is not a Whyalla problem – it is a GFG problem. And now GFG finds itself in a position where its creditors are not being paid. These businesses simply can’t wait any longer for Mr Gupta.”

Opposition Leader Vincent Tarzia said Mr Malinauskas was scrambling because he had allowed the situation in Whyalla to spiral.

“The government has known the full extent of this issue for over six months, and now at one minute to midnight, he is securing his position, leaving families and businesses in Whyalla on the brink,” Mr Tarzia said.

“The Liberal Opposition have been sounding the alarm on this since September last year, but all we have been met with is secrecy and spin.

“The people of Whyalla and South Australia deserve better.”

Originally published as SA Government enlists BlueScope chiefs alongside KordaMentha as Sanjeev Gupta’s OneSteel is dramatically ousted from Whyalla steelworks