Tom Koutsantonis meets with Whyalla steelworks workers over non-payments

Tom Koutsantonis says the Whyalla steelworks is “moving heaven and earth” to fix its stalled blast furnace – as concerns mount over continued non-payment of its contractors.

• Blue-collar backlash to city elites

Australia’s economic sovereignty hinges on the Whyalla blast furnace becoming operational as speculation reignites about the steel city’s future amid an ongoing outage.

Mining Minister Tom Koutsantonis has downplayed his most recent trip to the Upper Spencer Gulf relating to the embattled GFG Alliance plant, saying it was always planned and just a day earlier.

But he has held meetings with contractors and GFG as concerns mount about the dragging process in returning the blast furnace back online.

“They are moving heaven and earth to get it back online again,” Mr Koutsantonis told FIVEAA on Wednesday morning.

“What’s happening is they’re getting it close and meet a minor setback and lose a few days.

“This is not as simple as flicking a switch.

“The truth is one the blast furnace is operational and making steel (the money will flow).

“It starts and finishes with the blast furnace; once that’s working, everything else is working as well.”

Problems have plagued the blast furnace since at least March when an uncontrolled iron breakout damaged the outer shell.

It has been largely unproductive since, severely impacting the steelworks’ ability to produce steel, which Mr Koutsantonis said was critical to Australia’s economic sovereignty.

“Australia cannot be a country that relies on imported steel,” he said.

“We saw overnight the British government talking about nationalising its steelworks – it’s very important that Australia maintain this capability.”

Mr Koutsantonis told the program he was encouraged by the dedication of workers trying to repair the furnace on which so much depends.

“If South Australia saw the dedication in these guys they would be exceptionally proud of them,” he said.

Concerns are now around the non-payment of contractors and the trickle-down effect the stalled blast furnace is having on the region’s wider economy.

Mining Minister Mr Koutsantonis says he’s very worried about the contractors in Whyalla. Picture: Kelly Barnes

The Whyalla Steelworks blast furnace was damaged in March and is yet to get fully back online and operating at peak capacity. Picture: Ben Clark

“Yes I’m very worried about the way they (GFG Alliance) are treating their contractors,” he told ABC Radio Adelaide earlier on Wednesday.

“I’m very worried about the contractors here in Whyalla. I’m very worried about losing expertise and capability because of lack of payment this steelworks still hasn’t made since September.

“When a blast furnace isn’t working and you’re not making iron steel, you’re not creating the demand to keep on paying contractors, you’re not generating revenue, and without their revenue, they can’t pay bills.

“Now mining’s even stopped so … I’m very keen to see this blast furnace turn on because once that blast furnace is operating and pouring steel, we will see a lot more activity in Whyalla, which will start seeing a lot more of that money flowing around the city.”

Whyalla Mayor Phill Stone said the latest briefing from GFG anticipated the furnace being operational by next Wednesday or Thursday.

“The latest we’ve had through this afternoon through GFG is the blast furnace restart is getting close,” Mr Stone said.

“The furnace is running, it’s in ok condition but has backed off a bit to let it stabilise a bit.

“As far as payments, the information I have in front of me is agreements are in place with mining and transport contractors this week.

“Then they’re saying the entire mining supply chain can restart from this weekend which involves those contractors.”

British Industrialist Sanjeev Gupta . (AAP Image/Kelly Barnes)

Mr Koutsantonis said crews had been “working their guts out” to get it back online.

“It’s heartbreaking work for them,” he said.

“Every time they get close, they meet a small obstacle but they are committed to getting this thing back up and running again.

In late September, the government sought urgent advice on its exposure and role should GFG Alliance’s steelworks and iron ore operations be placed in voluntary administration, following the blast furnace going offline for the second time in a year.

Mr Malinauskas told parliament that the Australian steel industry was responding to increasingly slender margins and overseas price competition, particularly from China.

“South Australia and GFG are not immune to these global market pressures,” he said.

Mr Malinauskas told The Advertiser that after having talks with steelworks’ owner Sanjeev Gupta, he had been assured that Mr Gupta would continue working with creditors to “ensure the businesses’ obligations are being met in a co-ordinated way”.

Whyalla’s industry and economy revolves around the steelworks. Picture: Ben Clark

“This meeting was an important opportunity for Mr Gupta to reassure the South Australian Government of his intention to have the blast furnace back up and running in the coming weeks,” Mr Malinauskas said, in a written statement.

“Mr Gupta assured the South Australian Government of his intention to bring the Whyalla steelworks back up to full production, in light of the recent commercial opportunity presented by a reduction of iron ore and metallurgical coal prices.

Mr Malinauskas said the government would continue to monitor the situation, work closely with GFG and stand by the Whyalla community.

A month later, on October 21, the entire cabinet held a meeting in Whyalla on October 21 “to meet with key business and community stakeholders”.

Originally published as Tom Koutsantonis meets with Whyalla steelworks workers over non-payments