The Labor state government of South Australia (SA) has pushed new laws through parliament forcing the 1.2mn t/yr Whyalla steelworks, owned by UK-based GFG Alliance, into administration.
SA appointed KordaMentha as an administrator of OneSteel — which is part of the GFG group and operates the steelworks and associated 9mn t/yr iron ore mines in SA's upper Spencer Gulf region — on 19 February, citing a lack of confidence in GFG's ability to fund ongoing operations.
GFG acquired OneSteel in its takeover of Australian steel producer Arrium in 2017, a process also overseen by KordaMentha.
The city of Whyalla is reliant on the steelworks as its primary employer and the failure of GFG to pay creditors and service growing debts associated with the plant has led to a political crisis in SA.
The appointment of an administrator occurred after changes to the Whyalla Steel Works Act 1958 were rushed through state parliament on the morning of 19 February, the government said. The changes apply GFG's debts as a charge across all of OneSteel's real property, and thus readily enforceable.
SA premier Peter Malinauskas revealed this month that the state government is owed tens of millions of dollars in unpaid iron ore mining royalties, while state-owned utility SA Water is owed about A$15mn ($9.5mn).
