Ministerial Statement

Whyalla Steelworks

The Hon. P.B. MALINAUSKAS (Croydon—Premier) (14:06): I seek leave to make a ministerial statement.

Leave granted.

The Hon. P.B. MALINAUSKAS: Today I can announce that the Malinauskas Labor government has taken strong and immediate action to secure the long-term future of the Whyalla Steelworks by placing the business's owner into administration. GFG is no longer running the steelworks.

The state has appointed KordaMentha as the administrator of OneSteel Manufacturing Pty Ltd under section 436C of the Corporations Act 2001. OneSteel is part of the GFG corporate group and is the legal entity that owns and operates the Whyalla Steelworks and associated mines. During this period of administration, the administrator investigates options, including sale of the business, with the ambition of delivering the best outcome for creditors and the continued operation of the steelworks. The administrators will be able to trade on and pay all debts incurred during the period of administration. This means, critically, that workers and contractors will be paid.

KordaMentha has advised the state government that it intends to appoint experienced Australian steelmaker BlueScope to act as a special adviser to assist in the operation of the steelworks during administration.

The state government took the decision to place OneSteel into administration after losing confidence in the financial capability of GFG to pay its bills as and when they fall due. The government has equally lost confidence in GFG's ability to secure the funding needed for the ongoing operation of the steelworks. The government gave GFG every opportunity to make good on its promises and to bring creditors back into terms. It has failed to do so.

The government has received expert advice from its Steel Task Force that a continuation of the status quo and a lack of investment risks the steelworks deteriorating to the point where creditors will be impacted even further and where it will be difficult, if not impossible, to turn the operation around. In light of this advice, the state government has acted decisively and expeditiously.

The appointment of the administrator was facilitated by an urgent and minor change to the Whyalla Steel Works Act 1958, which passed state parliament this morning. I would like to take this opportunity to thank all my parliamentary colleagues, in particular the Leader of the Opposition, for supporting this legislation and expediting its passage. The parliament was today operating for team South Australia, and I want to thank all members for getting this done.

This amendment makes GFG's existing debts to the state government apply as a charge across all, rather than some, of the real property of OneSteel and makes them readily enforceable. The legislation, which is specific to the Whyalla Steelworks, also imposes new transparency obligations on its owner. Early and proactive steps will be taken by the state government and the administrator to stabilise operations and explore a possible sale to a new owner in a way that keeps the assets together and the steelworks operational.

Whyalla is critical to sovereign Australian steel. It is one of only two Australian steelworks, produces 75 per cent of Australian structural steel and is the only domestic producer of long steel products. Steel from Whyalla is how Australia can build and maintain its infrastructure, whether it is railways, high-rise towers, housing, windfarms, transmission lines, bridges, defence assets or hospitals.

Whyalla steel is present in big infrastructure projects, from Optus Stadium in Perth to the Western Sydney Airport terminal, to the Cross River Rail project in Brisbane. Without Whyalla steel, Australia would rely on steel from overseas amid a deteriorating strategic environment and a national housing crisis.

For months, my government has been carefully planning a strategy to address the challenges unfolding at the Whyalla Steelworks. Later today, I will be travelling to Whyalla where I expect to make further announcements about my government's steadfast commitment to support the people of Whyalla and deliver the industrial transformation required to realise the economic opportunity opening up in Upper Spencer Gulf. The South Australian government stands with the people of Whyalla and will not let them down.