Whyalla Steel Works (Port of Whyalla) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 14 May 2025.)

Mr PATTERSON (Morphett) (12:09): I take the opportunity in parliament today to speak about the Whyalla Steel Works (Port of Whyalla) Amendment Bill. I indicate that I will be the lead speaker for the opposition on this bill, which is a very important piece of legislation. It was introduced while the Whyalla Steelworks had some uncertainty about it. We have had OneSteel put into forced administration through a bill of this parliament, which was put through very quickly only in February.

Now, three months later, the administrator is going through a process. KordaMentha has been appointed as the administrator and we have this bill before us now. The notice for the parliament was through a ministerial statement on Tuesday from the Premier, who described that this was going to happen and then the bill was introduced to this house yesterday. Of course, the usual convention is that it sits on the table and waits until the following sitting week. However, because of the issues explained by the government of the need to move on this, the bill comes before us today. I am just putting that timeframe in place.

Of course, the opposition has used the limited time to the best of its ability, but obviously we will have more time between the houses. The comments I make today are based on the information provided so far. To that end, the government has provided a briefing to me and the opposition. I thank the public servants for providing me and the opposition with that briefing, because there are many questions arising out of this Port of Whyalla amendment bill that need to be worked through.

The basis informing judgement is wanting to see the success of the Whyalla Steelworks, for many reasons. One reason is for the people of Whyalla to ensure that their futures are positive. Also, the people of South Australia have always supported our regional towns because they provide so much economic impact to the state. Of course, Whyalla is very important, and the people of South Australia understand that. It is also important from a national point of view. I think all members in this parliament have put on the record the national sovereignty implications of being able to produce steel in your own country. Whyalla is the only steelmaker that makes structural steel in Australia, so it is very important in that regard.

This amendment bill amends the Whyalla Steel Works Act, the genesis of which was an indenture agreement in two parts back into the thirties, I think 1937, and then the indenture act of 1958. One of the key tenets of that act was recognising the opportunity of not only steelmaking but actually wider than that with the mines that feed the steelmaking and also the ports that allow that steel to be exported, whether that is out to South Australia or further on to Australia or the world. The integrated nature of that was one of the key tenets of the indenture act and they were not to be split.

Many times we will hear about keeping the mines tied to the steelworks, but equally so keeping the ports tied to it as well is vitally important and, to that end, tied to the one entity. If that entity tries to provide a right to another entity, whether that is a related party or an external party, that needs to be ratified by the state government and the minister of the day. That is a core tenet of the Whyalla Steel Works Act.

As has emerged and been provided to me in the briefing, there was a lease executed in 2018 between OneSteel and Whyalla Ports Pty Ltd, which was a related GFG Alliance entity. That was executed in 2018 in two parts from what I am led to believe. Of course we have the committee stage coming up, and we can ask questions about it, but I am led to believe that effectively it was a lease between 2012 and December 2018, formalising some form of lease and then an option to extend that lease by a further 99 years.

That is putting a 99-year lease on a port, which the South Australian public at large has a very big interest in. That is a substantial property rights transfer that no doubt the government of the day needs to (a) be aware of, and (b) needs to sign off on. We have seen issues around ports in other parts of Australia—the Darwin Port as well—and these significant long leases, and the issues that that has around sovereign capability as well. You can understand why that would need the consent of the government. The government here, from the minister's second reading speech and from the briefings, has said it contends that consent was never sought nor was consent granted for that lease, and, as explained, the bill before us clarifies this for that very reason.

Firstly, the bill before us effectively talks to what happens in the case of a lease being in contravention of an indenture act or assignment in contravention, basically saying it is void, but then also further on—which I will get to later in my remarks—talks about the specific lease that we have been discussing, which is the lease to the Port of Whyalla.

The other aspect of this is trying to understand these corporate structures. The briefing provided said that Whyalla Ports Pty Ltd was an entity that predated the first administration, so it was in operation going back a time. My understanding is it was part of the first administration back in 2017-18, of which KordaMentha was again appointed administrator. It was sold on to GFG Alliance as well.

That is a bit of the background around it, which the committee will help to unpack. As I said, in terms of going through the bill itself, I will briefly put down the key points. As far as I am aware, and the minister can advise in the committee stage, it declares any lease or assignment of rights made without state consent to be void, meaning invalid from the beginning. It also confirms no compensation is payable to any party as a result. It deems certain port infrastructure to be part of the land rather than personal property. It empowers the Registrar-General to update land titles accordingly, and it introduces regulation-making powers to manage any transitional or related matters.

The briefing to me stated that the reason this is being done and is being argued by the government is that these measures resolve an ambiguity to try to ensure operational continuity for the port and preserve the integrity of the integrated indenture model. That is what the government is saying.

We can talk about the fact that Whyalla Ports and OneSteel did not get consent. There are issues around that, of course. Going back to the administration process, we all saw and watched with great apprehension as the situation and the crisis in Whyalla unfolded last year and got progressively worse. The real concern, quite rightly, for South Australians, over and above Whyalla Steelworks maintaining its operations, was of course all the contractors, employees and workers at the steelworks and then also the companies that contracted to the steelworks.

One of those contractors was responsible for the mining operations that basically dug up the ore to then provide to the steelworks, namely, Golding Contractors, which is a subsidiary of NRW Holdings. I think NRW Holdings was established in 2007; it is certainly ASX-listed. It is in the ASX 200 and is a significant Australian company, and Golding Contractors is a subsidiary of it. Golding has operated at Whyalla since 2019, providing mining services under a longstanding agreement with OneSteel. It has invested significantly in the region, employing over 1,000 people since 2019, and there are still 350 employees working on site.

While Whyalla was going through GFG not paying the bills, Golding Contractors still made sure—even though they were not getting paid—that their employees were getting paid. So they have been a good-faith actor. This is just to hold up one example; you would have to say that every company that was there was working to try to get the steelworks back up and running, while not being paid for that. They were all acting in good faith to try to get things across the line in the hope that, once the furnace was restarted, the money would begin to flow. Of course, while GFG was in charge, that did not happen, and it resulted in the administration.

Going back to Golding, they have explained that, during this process in 2024, they were doing things. I think it is not unusual for companies to have these sorts of outstanding debts, but it was getting to the stage where they wanted to get security. So they, with a lot of negotiation and even the stopping of mining operations, struck an agreement where they were able to negotiate a first-ranking security investment over the assets of Whyalla Ports, including the infrastructure located on the leased land. My understanding, and maybe the committee will be able to clear this up, is that this was done with the knowledge of the government—the understanding that the securities had been placed over to Whyalla Ports by Golding. In so doing, it provided a foundation for Golding to continue to run their operations and basically provide the iron ore out of the mines.

I am advised that Golding is owed around $113 million, and despite this not being paid, as I said, the company continued to meet its obligations to workers and suppliers. The reason I say that is because, at the moment, there is also court action presently in place, because KordaMentha, the administrator, has sought to dispute the lease and basically take it to the court to allow the court to rule that the lease is in fact invalid.

There was a court order made, I think in late April, that allowed Golding to join these court proceedings as a defendant, with Whyalla Ports being the other defendant, as I noted in question time yesterday about this court action VID420/2025. That has been scheduled for a court hearing on 2 June to basically work through the lease and what the implications are: is it invalid? That is going on in parallel to the process that we are talking about here in parliament, which is a bill that basically rules that the lease is invalid and is void, as I explained before.

There are issues there, and I think all members of parliament would understand that that causes concern. Effectively, there is a court process in place, and the usual process is that parliament makes the rules, enacts the laws, and then the courts rule on those laws going forward. But this is an extraordinary situation we have here where the indenture act has to be clarified via this legislation.

The other aspect of the effect of this bill is when we look at schedule 4, clause 4 which talks about interests in certain rail and other infrastructure. I think there needs to be questions asked in committee around that. Whyalla Ports was a company in operation before 2018, before administration, and KordaMentha in its first turn at being the administrator sold that company to GFG Alliance. At the time, there was significant infrastructure and property on that port: ship loaders, conveyors, worth a significant amount of money. That plant, that property, was sold as part of the administration purpose.

I am advised that Golding, when they took security, were not only taking security over the lease but also over that property, which I think was recently valued at around $100 million to $200 million. Compare that to the $113 million that they are owed. I am not speaking for them, but it seems that that gave them the confidence to continue providing the mining operations that allowed the steelworks to continue to operate and try to work its way out of administration.

It appears to me that one of the implications—and we will have to ask questions in committee—is that the clause itself is titled 'Interests in certain rail and other infrastructure void and of no effect.' So we have that property on there and we need to understand what that means to the security interests of Golding. Hopefully, the minister will be able to answer the question: is there a way commercially that there can be agreement reached?

My understanding is that part of the court orders with the current court proceedings is that KordaMentha had a mediation that involved Golding and there was an attempt to come to commercial agreement, and there are public statements such that Golding have talked about wanting to come to a commercial arrangement. So it will be very interesting to know the level of consultation with third parties such as Golding in terms of what the effect of this bill will be and how that can be remedied as well, because I think that as much as possible, as a state, we do not want to have a situation where we have good faith companies trying to help but being significantly disadvantaged. I think there are certainly questions that we can ask around that.

In terms of the process going forward, the minister has kindly informed me that because this is a hybrid bill, before the second reading speech concludes we will look to go into a select committee on that. Reflecting on that, it is worthwhile, because my understanding is that the reason for having a hybrid bill is because we are really affecting a narrow class of people—parties, I should say, not just people—by this bill and therefore it allows for the parliament, when it is making these decisions, to ensure that there are no interests being unfavourably advantaged by this and the select committee will allow that to take its course.

It can actually play a good role, in terms of informing parliament, because it will allow us the opportunity, potentially, on the public record, to take some evidence from some of the witnesses as well. I would like to hear first-hand from Golding around what this could mean. I would also like to hear the advice from KordaMentha as well. That would be an advantage to understand what advice they are getting from this. There are other bodies as well, such as Flinders Ports. I think they are a debtor to Whyalla Ports for the operation they do in terms of helping out with piloting and mooring the ships as well.

Certainly by getting that evidence I think we will be able to clarify some of the questions that we, no doubt, have. I note that the intention is to have three government members, one opposition member and a crossbench, and I would welcome the opportunity to have additional opposition members as well, if it means enlarging the committee. I think it would be advantageous, certainly for the opposition to have two members on this committee.

The Hon. A. Koutsantonis: Patto, you are worth three.

Mr PATTERSON: I would like three but I am mindful of the fact—

The Hon. A. Koutsantonis: You are the whole team. You are the hope of the side.

Mr PATTERSON: And I take that responsibility earnestly, but I feel there is some talent that could also come to bear in this. It is an important and extraordinary position that the parliament is considering here today in terms of what actions it is taking.

As I said, you have got the court process allowing it to do its business and the action of this bill may well be that, effectively, rather than waiting for the end of that to hear what the court has to say, it basically just rules that this is the decision that is taken. That is why I have raised the questions around the property rights. The lease I have explained early in the remarks, that 99-year option, I think it is quite clear that needed consent. This bill will clarify that, as advised by the government.

Putting the property rights basically back to OneSteel, that certainly has raised some questions that I tried to go through in my earlier comments. What will the effect of this be on, as I said, Golding as A—and I am not here to be their main cheerleader. I am here to make sure that companies that will operate here in South Australia going forward, can have full confidence that they are in a jurisdiction where they are not exposed to heavy government intervention that could adversely impact them.

We have seen the impacts on NRW, as I said before. As they are ASX-listed, their share price has gone down $500 million since the administration was announced. It has dropped by $100 million only in the last day since these measures were announced by the government and we are now debating as we go through this.

There are certainly some issues there. It will be interesting in the committee stage as well to talk through some of the advice that has been received and as to whether that is the advice that is being received. Is it Crown law? Is the Crown Solicitor providing that advice? Is it another eminent legal practitioner who is providing that, and can we be given that advice as well?

As I was briefed, the government is of the firm opinion that their position is well founded and that this in fact would have been the eventual situation at the end of the actual pending court case listed for 2 June. I think, at the moment, court orders have it down to last for 3½ days, so the hearing should be finished by the end of that week, quite imminently.

They are some of the considerations that hopefully in the committee stage will be brought to bear. It certainly is a complex legal matter. It is a commercial matter as well, as I said, so the parliament here should and will make sure it is doing its rightful duty to go through these matters properly and that is the process we will go through. Ultimately, the intended legislation is to give clarity to what is going on with Whyalla Ports and in so doing reconfirm that the indenture which has the mine, the steelworks and the port, basically operate as one for not only Whyalla's benefit but the state's benefit as well.

We really urge the government to proceed carefully and transparently with us and to be open and take questions because, as I said in my opening remarks, it has come through quickly. It was announced that would be introduced Tuesday, was put into parliament Wednesday, and we are now deliberating on it on Thursday. So we have had to take a lot of information on a trust value and are hoping that trust can be continued and confirmed via the questions. We will continue to engage thoughtfully during the select committee stage, this being a hybrid bill, and then also the committee stage of this bill, just to make sure that the legislation will be implemented with fairness, accountability and the awareness of what the broader consequences could well be for this legislation.

Mr TEAGUE (Heysen—Deputy Leader of the Opposition) (12:37): I rise to endorse the remarks just now of the shadow minister and perhaps just to highlight one or two points about what is undoubtedly an unusual piece of legislation, so defined. For good reason, it has been characterised as a hybrid bill and it is going to be referred off in a moment to a select committee, as the shadow minister has just flagged, before the opportunity to interrogate that via a committee of the whole house in due course.

I really urge the government in these circumstances to provide an opportunity for more than just a sort of perfunctory select committee process on this referral. There is a good reason why hybrid bills are referred to select committees. I have been a member of such committees in the past where the subject matter is uncontroversial, as has the minister, and I know what it is like to get leave to have those select committees sit at lunchtime so that the process can be run through. They start and finish within about 30 seconds and we come back, report to the house and so on. That is not this case.

This is a matter of considerable substance, and before I get to what might be a source of controversy, we are going to be talking a lot, I suspect, over not just the days and weeks ahead but the months ahead as this administration continues, about what team South Australia looks like. Of course, we are all on team South Australia.

We on this side of the house have provided the government with support earlier this year to pass through this house, at lightning speed, legislation that has characterised the administration that has been ongoing for some months. The administrators have gone to the courts a couple of times providing updates about how that is going and what it is costing, and we are all looking for an outcome that is going to get Whyalla back on track, that is going to get the steelworks back on track, that is going to have everybody thriving at Whyalla and in the region.

This is a hybrid bill, unlike the previous bit of legislation, because it is understood that it affects a narrow group of interested parties, including Golding—a party that has been given in recent weeks leave by the Federal Court of Australia to intervene in proceedings that are the subject of the purported lease. So there is no doubt about the narrow group of interests that are affected by this bill; and it is not only OneSteel, as is revealed on the face of the record of the Federal Court.

The shadow minister has referred in his remarks to the order that was made, and I understand that was made on 29 April. We are in circumstances, folks, where the government is acting to deal with what the Premier described on Tuesday in this house as a need to clarify something that is, in the Premier's words, 'purported' ahead of what might be controversial; we are not correcting something that the court has found is the subject of some ambiguity, but what is happening, we have discovered—because the Premier did not own up to it on Tuesday in his statement to the house, so we are all having to find out these things as we go—is that we are undoubtedly contemplating all of this in the midst of ongoing proceedings before the Federal Court.

That 29 April order made it clear—if it was not already clear—that there are real matters of substance that are being litigated and that, if they were not substantial, then more summary relief might have been sought by the administrators, and that might have been granted and all the rest of it. What we are seeing is undoubtedly a serious question of law that is to be tried, which has been set down for trial for three days, commencing 2 June.

The Hon. A. Koutsantonis: Do you want to wait for that?

Mr TEAGUE: The minister interjects, 'Do you want to wait for that?' We will get to that in a moment, but let's just understand where we are. The government has not come to the house on Tuesday or, as I understand it in any of its briefings to the opposition, to explain the circumstances of why parties have been given leave by the Federal Court of Australia just a few days ago.

In the case of Golding Contractors Pty Ltd—a subsidiary of NRW Holdings, which has had some mention in the course of the debate—leave has been granted to that company to intervene in the proceedings, that is, to become a party, and leave has been granted to Whyalla Ports, which has also had some mention in the course of this debate, to file and serve a cross-claim in the proceedings—all of that on a fairly short timetable to the hearing that has been set, commencing 2 June. Alright, we might all say, 'Okay, that sounds like legal proceedings and that sounds like that could run on endlessly,' so that is what we are all here for: to ensure that something happens immediately and with certainty, and all the rest of it, and that that is what team South Australia looks like.

Let's just put this in perspective. I stress that the government was given an opportunity yesterday in the parliament to tell us all about what it knew about the court proceedings, and it decided to say nothing more about that. That is on the record from yesterday. It was also asked specifically whether the administrators had requested this action and, again, the government had nothing to say about that.

So, at every turn, the government, in terms of doing its bit to be part of team South Australia, has chosen not to tell us in advance all about exactly why we are here, who is affected and why we can have full reassurance that team South Australia looks like looking after bona fide participants, including those who employ people in Whyalla and look for the best interests of those people, including the thousand or so that NRW says that it has employed in South Australia since assuming mining services work in 2019. There will be a bit more to say about that, I hope, also in the course of the select committee and the committee stage of debate in the course of the consideration of the bill in this house.

What else do we know? We are standing here on 15 May and, by an ASX announcement dated 14 May—yesterday—NRW has seen it as necessary to make an announcement through its company secretary to the stock market about its concern about the consequences for NRW. As I said earlier, NRW Holdings is the parent company of Golding Contractors that is providing services at the port.

The government has had nothing to say about that so far as I am aware. I just stress that the concerns that the shadow minister has highlighted are because not only does the bill go to—and I will put it in the terms that the Premier did—clarify the situation of the purported lease, but it also goes out of its way to void any personal property rights that might be the subject otherwise of assets at the port.

NRW makes clear in its announcement to the ASX that it has obtained comfort in respect of its ongoing works and employment of local people, and carrying on with a view to the steelworks achieving its best outcome. It has gained comfort from personal property rights that it thought were good, associated with assets at the port, and it would look like those personal property rights are voided by the consequence of this bill. So I will be very interested to know what the government has to say—

The Hon. A. Koutsantonis interjecting:

The DEPUTY SPEAKER: Minister, you will have a chance to respond in your closing remarks.

Mr TEAGUE: —about the consequences for that company. Just a word or two about NRW Holdings: it is a publicly listed company. It will say it has shareholders, including South Australians, including pensioners, including all sorts of people who have seen fit to invest in that company. No-one is suggesting that NRW Holdings or Golding are anything other than bona fide. As I understand it, NRW was founded some 30 years or so ago and has a present market capitalisation in the order of $1.2 billion on revenues of around $3 billion.

Yes, it is WA-based and, yes, Golding is Queensland-based—mining services are provided all over the country, including, as I understand it, and particularly, in the Pilbara to BHP and to Fortescue and to Rio Tinto among others.

NRW has been moved—as I read about it as it moves along—to request a trading halt today, and has seen its share price drop by around 10 per cent, including in the circumstances of the announcement it was moved to make to the ASX. There is no doubt that the contemplation of the bill is having real-world consequences for NRW Holdings, so in a very real sense it is the responsibility of this place to scrutinise just what exactly this bill is going to do to that bona fide participant in keeping things working at Whyalla.

The mining industry in Australia is of huge importance to the nation, and the mining industry in South Australia is, no doubt, of huge importance to South Australia. Just earlier this week I was grateful to be a guest of the minister, and had an opportunity to hear from BHP, in particular, about the tremendous work it is doing in South Australia on the copper side. BHP is obviously operating very significantly in South Australia as part of its operations around the rest of the country, indeed around the world. It is one of South Australia's—and Australia's—proudest achievements.

As I said, in a very general sense BHP is drawing on the services of expert and bona fide participants in the industry, I fully expect including NRW Holdings and Golding, and other subsidiaries of NRW Holdings, providing a whole range of different services to the industry. In the broadest sense, let alone in the very immediate sense, in terms of their rights, the healthy capacity for investors, large and small, in the industry to have confidence in what they going to find when they are in South Australia is right at the core of what team South Australia looks like. We want to know, on this side, that what the government is proposing is going to actually work out in the best interests of Whyalla and of the people of Whyalla in that vein, and in the interests of those who would invest in Whyalla now and into the future.

To get back to the present moment, in terms of these ongoing court proceedings the shadow minister referred to what we all understand occurred on or about 18 April, being a mediation between the parties. We know about that because it was noted in the previous court order that that was to occur. We can presume that any mediation that has taken place has not yet resolved the proceedings because they are still heading towards resolution by findings. So there is one live means by which competing legal interests might be resolved.

The government has chosen not to provide a front-end explanation as to why that is not going to be suitable for the resolution of those competing interests. It would be of great help to this place to see the select committee take the opportunity for at least that to be better elucidated, so that it can report back here and perhaps inform the committee of the whole house. But that is as much as we know.

I say this to all of those in Whyalla, all of those associated with the steelworks, all of those interested in the long-term best interests of Whyalla and the region: we want to be acting with integrity in the course of this process. We will work with the government to that end, but it is a hybrid bill for a reason. It is doubly unusual because it is right in the middle of fairly short-run legal proceedings that clearly involve serious differences of view that are being litigated. We need to know more than what the government has chosen to put on the record so far.

The Hon. A. KOUTSANTONIS (West Torrens—Minister for Infrastructure and Transport, Minister for Energy and Mining) (12:55): I thank the opposition for its support of this bill. They have confirmed already that they agree that no lease exists and that they will proceed to support this bill. On that basis, I conclude my remarks and thank the opposition.

Bill read a second time.

The DEPUTY SPEAKER: In respect of the Whyalla Steel Works (Port of Whyalla) Amendment Bill 2025, the bill is designed to rectify an error in its operation, namely, to rectify the illegal lease on a parcel of land for which OneSteel is the registered proprietor for the purpose of operating the Port of Whyalla. The intent of the bill is to invalidate the lease so that no further obligation is present to fulfil the lease and its terms, with the land being returned. As such, OneSteel will be a beneficiary.

While the Whyalla Steel Works (Port of Whyalla) Amendment Bill 2025 by its nature is a private bill, it has been introduced by the government and therefore the application of the joint standing orders as they apply to private bills is not relevant. This leaves the provisions of the joint standing orders as they apply to hybrid bills.

The joint standing orders provide for two forms of hybrid bills. The first is a bill introduced by the government, whose object is to promote the interests of one or more municipal corporations or local bodies and not those of municipal corporations or local bodies generally. The second is a bill introduced by the government authorising the grant of Crown or wastelands to an individual person, a company, a corporation, or a local body.

Clearly, this bill does not fit the second category, but it does fit the first because it satisfies the definition based on precedent of a local body encompassing a corporation or company that has some benefit of, or operating within a confined geographical locality.

Based on the precedents established by this house and the consistent application of the joint standing orders and the principles that guide the consideration of such bills, I rule the bill to be a hybrid.

Referred to Select Committee

The Hon. A. KOUTSANTONIS (West Torrens—Minister for Infrastructure and Transport, Minister for Energy and Mining) (12:57): I move:

That this bill be referred to a select committee pursuant to joint standing order No. 2.

Motion carried.

The Hon. A. KOUTSANTONIS: I move:

That a committee be appointed consisting of the Minister for Energy and Mining, Mr Patterson, the Hon. D.R. Cregan, Mr Odenwalder and Ms Clancy.

Motion carried.

The Hon. A. KOUTSANTONIS: I move:

That the committee have power to send for persons, papers and records and to adjourn from place to place, and that the committee report later today.

Motion carried.

The Hon. A. KOUTSANTONIS: I move:

That the committee have leave to sit during the sitting of the house today.

Motion carried.

Sitting suspended from 12:58 to 14:00.