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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2024-09-25 Daily Xml
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GFG Alliance

The Hon. V.A. TARZIA (Hartley—Leader of the Opposition) (14:17): My question again is to the Premier. Has the Premier sought assurances from GFG Alliance today that it can pay its debts as and when they fall due and payable?

The Hon. P.B. MALINAUSKAS (Croydon—Premier) (14:17): We have regularly communicated to GFG, not just in recent weeks but over years, as I am sure the former government did when these matters arose from time to time. It is the government's expectation that they meet their financial obligations as and when they fall due to the various and quite numerous creditors they have throughout the state and around the country.

The other thing I would say, though, just to add to that, is, of course, it is the government's expectation that directors of GFG in their Australian operations abide by the law. There are very clear duties that are required, as a matter of law, upon directors to ensure that businesses and enterprises trade in a way that is solvent—that is to say that they meet their debts as and when they fall due and they have the capacity to do so. Those directors' duties exist on GFG as much as they do on any other enterprise that operates within the state of South Australia.

It's worth, though, illuminating the house about some of the variables that GFG is seeking to contend with. They are serious and not all of GFG's making. Yes, there have been troubles in respect of the blast furnace, and they have largely been overcome with an extraordinary amount of work. The current difficulty they are having with the blast furnace speaks to an impurity that was allowed to present itself within the blast furnace. As it is in its hot idling state, the impurity is progressively being addressed.

On the advice that we have got from GFG, they expect that, in the early days of October, that will be resolved and the hot idle state that the blast furnace is in will be lifted, allowing the blast furnace to return to more commercial operations. That will be a good thing for cash flow within the business. Its obligations to customers, though, are being met out of inventory that it currently has on hand; that is the advice that we have.

Separately to that, of course there are other problems that the company has had in regard to securing supply of coking coal. Again, that has largely been addressed. There is an import of a significant volume of coking coal that has been sourced from an overseas market, coming to Australia via Indonesia, and that is due to arrive in the not-too-distant future, if it hasn't already. The other element is that they were able to secure a supply of coking coal from BlueScope. We would like to put on the record the state government's acknowledgement of and appreciation for BlueScope engaging in a degree of fellowship and stewardship throughout some of these various concerns that GFG has had.

On top of that, of course, GFG is confronting global headwinds in terms of the steel market. The global price of steel has reduced substantially, and that is causing not just problems for GFG but for global steel producers. That is particularly of concern within China, and of course that in turn is having an impact on iron ore prices that have started to come back in not-too-recent history.

So we are seeing a number of challenges that GFG has, but of course, whatever those challenges are, they do not exonerate GFG, or relieve GFG, of their obligations that they have under Australian corporations law.

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