Peter Malinauskas says government to support a Whyalla steelworks buyer to get sovereign steel making back on its feet

The Premier has reacted to fears Whyalla’s troubled steelworks could run out of cash by the middle of May.

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Premier Peter Malinauskas has addressed concerns Whyalla’s steelworks has insufficient funds to meet its forecast operating expenses, and could run out of cash within months.

The steelworks was forcibly put into administration by the state government on February 19 with KordaMentha as administrator and a subsequent $2.4 billion rescue package was announced by the federal and state governments.

Whyalla steelworks shut down again for repairs and maintenance of blast furnace. 14 March 2025. Picture: Dean Martin

In an affidavit lodged with the Federal Court, KordaMentha warned Whyalla’s OneSteel had insufficient funds to meet its forecast operating expenses, meaning it could run out of cash by the middle of May.

OneSteel owes more than $1.3bn across 68 secured creditors and 648 unsecured creditors, according to the affidavit.

Premier Peter Malinauskas told FIVEAA the administrator was highlighting a worst-case scenario.

“What KordaMentha is pointing out is the cash position of the business in a worst-case scenario,” he said.

“What everybody knew, including both the state and the federal government, as we entered into this exercise, that we would put on the table funding for the administration, but also working capital for the business so they can be stabilised and start to generate cash again,”

He said the government funding would see the first six months of administration through while the business started to generate revenue.

“(We) always understood that there would be the need for more working capital or more cash for the business as administration went on,” he said.

“We anticipate that this process will go for probably around at least 18 months, and we know that from past experience, so we stand ready to make sure that the business is able to be stabilised, it can start to generate revenues … put itself in the best position for sale.

“You’ve got to remember this business in its totality was generating extraordinary amounts of cash, $7.8 billion worth of iron ore was exported by GFG because of the associated mine so there is a valuable enterprise there and particularly when you link it to a functioning steelworks that has been recapitalised.

He said a new owner would be supported by the government.

“We don’t expect someone to buy the business, and then everyone say ‘okay, good luck’,” he said.

“What we’re saying is buy the business and government will partner with you in the investment in the big capital upgrades to transform the steelworks to make it be able to wash its own face so we don’t have a cycle of repeat administration over decades to come.

Premier Peter Malinauskas at Whyalla Hose and Fitting Services. Picture: Brett Hartwig

“(This is) a big opportunity for a new owner, with big capital injections from the government to be able to get sovereign steel making back on its feet in this country.”

Mr Malinauskas comments come after news Whyalla steelworks’ blast furnace was set to shut down again, only three months after resuming operations.

The imminent shutdown comes not long after coming back online again in January this year.

According to a 7News report, the facility will be closed for at least two days for maintenance beginning on Wednesday.

Urgent repairs are also required for other equipment while work is paused.

Originally published as Peter Malinauskas says government to support a Whyalla steelworks buyer to get sovereign steel making back on its feet