PM unveils $2.4bn rescue package for embattled Whyalla steelworks

The federal and South Australian governments have come to the rescue of the embattled Whyalla Steelworks.

The federal and South Australian governments have united to fund a $2.4bn rescue package for the embattled Whyalla Steelworks.

The move could save some 3100 direct and indirect jobs that depend on the key smelter, which produces 75 per cent of Australia’s structural steel.

Anthony Albanese unveiled the move with South Australian Premier Peter Malinauskas in Whyalla on Thursday.

Anthony Albanese has unveiled a rescue package for the embattled Whyalla Steelworks. Picture: NewsWire / Tim Joy

“This is the heart of this area in Whyalla, but the arteries spread out right around the country,” the Prime Minister told reporters.

“Jobs in construction, jobs in railways, jobs in the new airport in Sydney, jobs in major infrastructure projects, in construction in a new building and in the defence industry that is also a very important part of South Australia’s present and more importantly South Australia’s tremendous future going forward.”

Both governments will stump up an initial $500m, with the Commonwealth also drawing another $500m from its Green Iron Investment Fund in the longer term.

The rescue package comes after the South Australian government forced the steelworks into administration because it was on the way to “compromising” the Australian steel industry.

The Whyalla Steelworks directly and indirectly supports some 3100 jobs. Picture: David Williams / AFP

It has been haemorrhaging money for months, fuelling doubt that owner GFG Alliance could meet its mounting debt obligations.

Mr Malinauskas said the package was not a “bailout” for the steelworks’ owner, British steel magnate Sanjeev Gupta.

“There is no bailout here of GFG,” he said.

“They will have to deal with the process of administration.

“What we’re going to do is support the businesses on the ground who have done nothing wrong and do not owe anything to anyone.”

Mr Gupta purchased the plant in 2017 for $700m, promising to reinvest in the ageing works and transform it into a “green steel” plant.

Mr Malinauskas has accused Mr Gupta of failing to invest in the plant.