Canberra: Australia’s Prime Minister (PM) and the Premier of South Australia (SA) have announced a 1.5 billion U.S. dollar support package for a major steelworks after its owner was placed into administration.
Anthony Albanese and Peter Malinauskas on Thursday unveiled a 2.4 billion Australian dollars (1.5 billion U.S. dollars) support package for the steelworks in the SA town of Whyalla.
It comes after Malinauskas on Wednesday forced the owner of the steelworks, a subsidiary of the multinational Gupta Family Group (GFG) Alliance, into administration over tens of millions of dollars in unpaid debts to creditors, including the state government.
Albanese and Malinauskas on Thursday said the support package would ensure that staff and creditors are paid while administrators find a new owner for the business.
“There’s no industry that is more important for our nation than steelmaking, and here in Whyalla 75 percent of Australia’s structural steel is made right here,” Albanese told reporters.
The support package will be rolled out in three phases – immediate, short-term and long-term – and will be jointly funded by the federal and SA governments.
The first 100 million Australian dollars package includes funding to pay creditors and infrastructure upgrades.
The second package of 384 million Australian dollars will fund the steelworks’ operations during administration.
The remaining 1.9 billion Australian dollars has been set aside for upgrades and new infrastructure under a new owner to guarantee the long-term future of the business.
“This is not about the survival of the steelworks. This is about a long-term future for steelmaking in this country,” Malinauskas said.
The chief executive and chair of the GFG Alliance, British billionaire Sanjeev Gupta, had promised to sell shares in a coal mine on Australia’s east coast to repay the steelworks’ creditors, but Malinauskas on Wednesday rushed through new laws allowing the government to take control of the plant.
In an internal GFG Alliance memo published on Thursday by the Australian Financial Review, Gupta said the state government was on the “wrong course” and that he was seeking legal advice on the issue.
The Whyalla steelworks produces approximately 1.2 million tonnes of raw steel every year. The SA government has appointed Melbourne-based firm KordaMentha as its administrator.
The firm said keeping the steelworks running would preserve around 4,000 jobs. (1 Australian dollar equals 0.64 U.S. dollars).
