Synopsis
Australia's PM Anthony Albanese and SA Premier Peter Malinauskas have launched a $1.5 billion support initiative for a key steelworks after its owner entered administration, ensuring staff and creditors are paid during the transition.Key Takeaways
- $1.5 billion support package announced for steelworks.
- Package aims to protect 4,000 jobs.
- Funding distributed in three phases.
- Seeks a sustainable future for steelmaking.
- GFG Alliance's owner is under scrutiny.
Canberra, Feb 20 (NationPress) The Prime Minister of Australia, Anthony Albanese, alongside the Premier of South Australia, Peter Malinauskas, has introduced a substantial support package worth 1.5 billion US dollars for a significant steel manufacturing facility following its owner's transition into administration.
On Thursday, the leaders revealed a combined funding of 2.4 billion Australian dollars (equivalent to 1.5 billion US dollars) aimed at revitalizing the steelworks located in the South Australian town of Whyalla.
This announcement follows Malinauskas' decision on Wednesday to place the steelworks, which belongs to the multinational Gupta Family Group (GFG) Alliance, into administration due to substantial unpaid debts to its creditors, including the state government.
Both Albanese and Malinauskas emphasized that this financial support would ensure that employees and creditors receive their due payments while the administrators search for a new owner for the facility.
“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 produced,” Albanese stated during a press briefing.
The aid will be distributed in three phases: immediate, short-term, and long-term, with funding provided jointly by the federal and South Australian governments.
The initial phase of 100 million Australian dollars is allocated for creditor payments and infrastructure enhancements.
The second phase, amounting to 384 million Australian dollars, will sustain the steelworks' operations during its administration, according to a report from Xinhua news agency.
The remaining 1.9 billion Australian dollars is earmarked for upgrades and new infrastructure under prospective ownership to ensure the business’s long-term viability.
“This is not merely about the survival of the steelworks. This is about a sustainable future for steelmaking in our nation,” asserted Malinauskas.
The CEO and chairman of GFG Alliance, Sanjeev Gupta, previously indicated intentions to sell shares in a coal mine located on Australia's east coast to settle the steelworks' debts. However, Malinauskas expedited new legislation granting the government control over the facility on Wednesday.
In an internal memo from GFG Alliance made public by the Australian Financial Review, Gupta remarked that the state government was heading in the “wrong direction” and mentioned he was obtaining legal counsel regarding the matter.
The Whyalla steelworks has an annual production capacity of approximately 1.2 million tonnes of raw steel. The South Australian government has appointed the Melbourne-based firm KordaMentha as the administrator.
The firm indicated that maintaining operations at the steelworks would protect around 4,000 jobs.
