The South Australian (SA) state government will provide A$319mn ($228.5mn) in additional funding over the next two years to support the sale and operations of the 1.2mn t/yr Whyalla steelworks, it said in its 2026-27 budget today.
The SA government placed the steelworks into administration in February 2025. It has since received over A$2.88bn in state and federal funding, which the governments say is needed to secure sovereign steelmaking capabilities and support low-emissions manufacturing.
The SA government also allocated A$6.5mn over two years to support Whyalla's transition towards low-carbon steelmaking. The state government added that its 200PJ gas deal with Santos will support the steelworks' transformation. The deal will see Santos deliver about 20 PJ/yr (534mn m³/yr) to the Whyalla steelworks under a 10-year binding term sheet, starting in 2030.
Santos' gas will enable Whyalla to deploy direct reduced iron (DR) technology to process magnetite ore into low-carbon iron, chief executive Kevin Gallagher said on 20 February, cutting emissions by about 50pc compared to the former coal-fired blast furnace operations.
The state government on 27 May shortlisted two bidders to purchase the steelworks — Australian independent M Resources and India's Jindal Steel.
