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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2024-11-28 Daily Xml
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Whyalla Steelworks

Mr HUGHES (Giles) (15:27): I rise today to talk about what is, in my electorate, the most important issue—in fact, it is an issue of state significance and national significance—and that is the mining industry and the steelworks in Whyalla, part of our sovereign manufacturing capacity. There can be no doubt in anybody's mind as to the level of commitment on the part of the state government to seeing a prosperous future for iron and steelmaking in Whyalla. The commitment is well above 100 per cent; in fact, I am engaged daily in conversation about the future.

I know that my community of Whyalla want certainty. There have been job losses, there has been disruption to contractors who have had to lay people off, and some of the smaller companies have been going to the wall. But the commitment is there: 'We will work through these current difficulties.' We have made it very clear that the situation at the moment does have a degree of uncertainty surrounding it. When a community wants certainty and you cannot deliver it at this stage, for a number of reasons, that is concerning. But the reason why we do not have certainty at the moment is because it is an evolving situation in Whyalla at the mines and at the steelworks.

Most of the major contractors have essentially downed tools at the moment, pending negotiations with GFG about securing financial arrangements. The major contractors have downed tools. For some of the smaller contractors, most are being paid. Some are not, and we go in to bat for those companies that are not being paid. The issue with the smaller contractors, that domestic contractor base in Whyalla, has been the drying-up of work from the steelworks and the impact that is having.

The state government, and indeed the federal government, stand ready to act, but we need to know what the ultimate set of circumstances is going to be. As I said, this is an evolving situation. As a measure of the importance, the whole of the cabinet visited Whyalla a few weeks ago. We met with workers, with union delegates, with officials, with contractors, with GFG, and with Sanjeev Gupta and his senior team. We met with the council, we met with the Chamber of Commerce, and we met with other people to just hear directly from people.

We were there to express our support and to once again reiterate that message that we are there to back Whyalla all the way. Indeed, the largest investment in Whyalla in decades is going to occur with the hydrogen power plant, with some preliminary works starting early this year and with the contracts being signed off with General Electric when it comes to turbines. We have the green iron and steel expression of interest process that we commenced back in June. Fifty-two companies have put in an expression of interest, and when you look at the calibre of those companies—major international steel producers and major resource companies—it gives you some hope for the future.

In 2015 I initiated the change to steel procurement policy in South Australia. As part of that policy, we currently have an order for 120,000 tonnes of steel from Whyalla for road projects in Adelaide. We just need to get the blast furnace up and operating. I am currently lobbying for Northern Water, if that was to go ahead, to be built just to the south of Whyalla because that would make far more sense.

What we do need to see in Whyalla is that technology transition—that transition down the track to a direct iron reduction unit and an electric arc furnace and other peripheral developments. That is the direction that we need to go in. Natural gas will be a transitional reductive agent when it comes to that process, and ultimately we will be looking at hydrogen some years down the track. But the underlying fundamentals exist in Whyalla: the magnetite, the workforce, the port, the industrial infrastructure, rail, the connection to the grid, and the massive energy resources in our region. It is all there to secure a long-term future for steelmaking in our country. As I say, Whyalla is an incredibly important part of our sovereign manufacturing capacity, being the only integrated steelworks in the nation to produce structural steel and rail.

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