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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2025-02-20 Daily Xml
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Ministerial Statement

Whyalla Steelworks

The Hon. A. KOUTSANTONIS (West Torrens—Minister for Infrastructure and Transport, Minister for Energy and Mining) (14:03): I seek leave to make a ministerial statement.

Leave granted.

The Hon. A. KOUTSANTONIS: The domestic production of structural steel is critical to our national interests and security. Sovereign steel is how Australia can build its infrastructure, whether it is railways, defence assets, hospitals, housing, transmission or bridges. Without it, we would rely on steel and capability from overseas amid an increasingly uncertain international climate and a national housing crisis.

The Whyalla Steelworks is one of only two Australian steelworks. It produces 75 per cent of Australian structural steel and 100 per cent of the nation's domestic steel long products—like rail, which is critical to our defence and transport sectors.

It has been well documented that the Whyalla Steelworks has been facing challenges and the risks were mounting: for employees of the steelworks, contractors, small businesses in Whyalla and the nation's sovereign capability to produce structural steel. Yesterday, the state government placed OneSteel Manufacturing into administration. This has provided certainty of payment going forward to goods and services providers that are critical to keep the steelworks operating.

Today, the state government is announcing it is prioritising sovereign steel manufacturing in South Australia, with a multibillion dollar sovereign steel package in partnership with the federal government. The state government's contribution to the sovereign steel package will now come from funding set aside for the Hydrogen Jobs Plan, which is now being deferred to prioritise securing the steelworks, as well as $50 million from the Whyalla Steelworks Operational Efficiency Improvements Fund.

Circumstances at Whyalla mean the state government must make necessary investments to set the steelworks up for the long term. While now is not the time to pursue such a significant investment in hydrogen, the state government retains the belief that hydrogen is a critical input into the decarbonisation of iron and steel products. We remain committed to the establishment of a hydrogen industry in Australia that will ensure the transition to green iron and steel. The Office of Hydrogen Power SA (OHPSA) will continue to operate, with a focus on exploring and facilitating investment opportunities for a hydrogen industry in South Australia.

OHPSA has undertaken a significant body of work, including the procurement of hydrogen-capable gas turbines. Rather than sitting idle, these turbines will be on-sold for the original purchase price or higher, with the guarantee they will be installed in South Australia to provide additional generation capacity to a current non-market gentailer. This means the state will recoup all of its capital expenditure and realise enhanced energy generation for South Australia. The world wants green iron and steel, and hydrogen will play an important part in that transition. But South Australia can only manufacture green steel with a strong, sustainable Whyalla Steelworks. This must be our priority.

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