British billionaire Sanjeev Gupta meets with the state government over the future of the Whyalla steelworks

The GFG Alliance chief executive has met with the state government in Adelaide after growing concerns over the town’s steelworks future – and there’s good and bad news.

Blast furnace cast house floor. Steelmaking has resumed at the Whyalla Steelworks after an expert and exceptional, GFG Alliance team was able to restart the blast furnace. Picture: Supplied

Premier Peter Malinauskas says there’s still “a long way to go” in shoring up the future of the Whyalla steelworks – but the resumption of steel production at the plant is a positive step.

GFG Alliance chief executive Sanjeev Gupta met with the state government to discuss the future of operations in Whyalla after the blast furnace at the steelworks restarted partial production this week.

Mr Gupta visited Whyalla on Thursday following a four-month furnace shutdown, then on Friday met with members of the government including Mr Malinauskas.

“We have heard good news emanate from the steelworks over the course of the last 48-72 hours with steel now coming out of the blast furnace, which is a good outcome, but there’s still a long way to go,” the Premier said.

GFG has also cautioned there is a long way to go before the plant is “stable and secure”.

Mr Malinauskas said repayment of creditors – which has for months been an issue – was one topic that was discussed at the meeting.

“Of course, GFG’s capacity to be able to pay is dependent upon the steelworks operating, which means the news around the blast furnace being at 60 per cent capacity now is welcome.

“GFG has a plan to get the steelworks profitable again, that’s its core objective and nothing is more important in that regard than getting the blast furnaces up and running.

“Now that we’ve seen that hopefully we’re heading in the right direction.”

Mr Malinauskas said the government has a range of contingency plans in place for the steelworks.

During his lightning visit to Whyalla, Mr Gupta met with mayor Phill Stone and steelworks employees to thank them for their efforts in restoring the blast furnace.

“The community is over the moon, to use that old phrase, because certainly by the end of year, the morale in Whyalla was really down,” Mr Stone said.

The blast furnace cooled too much during a two-day maintenance shutdown in mid-March, which caused blockages within the furnace’s wind tuyeres.

Now, it’s operating at 60 per cent, with hopes of restoring it back to full production by March.

Sanjeev Gupta, executive chairman of the GFG Alliance meets with workers at the Arrium steelworks at Whyalla.. Picture: Bianca De Marchi

Mr Gupta’s trip came amid ongoing concerns about the non-payment of contractors, as well as the trickle-down effect the stalled blast furnace is having on the region’s wider economy.

Speaking to the media on Christmas Eve, Mr Malinauskas appeared uncharacteristically frustrated by the situation, admitting it was the biggest issue on his mind heading into Christmas.

He reiterated that it was “occupying a significant amount of government effort and time”.

“We haven’t seen things go as well as we would have liked over the last month,” he said.

“But I know that there’s a lot of hard working people in the steelworks … who are doing everything they can to bring the blast furnace back to full operation.”

State parliament was also told last year that the GFG was behind in its mining royalty payments, although it was not disclosed how much the company owes.

Originally published as British billionaire Sanjeev Gupta meets with the state government over the future of the Whyalla steelworks