Whyalla steel $2.4b bailout as Albanese seizes ‘extraordinary opportunity’
“It is very clear that this is an extraordinary opportunity. You have steelworks with such a history, you have the best quality magnetite or as good as anywhere in the world, you have an extraordinary port facility and a future that the world is looking at,” Albanese said.
“What governments need to do is to look not one year ahead or five years ahead but look at where the opportunities are for Australia.”
South Australia Peter Malinauskas said he never contemplated a bailout for Gupta, but now the government had seized control, it could make investments to secure the future of the mill’s 1100 workers, critical to the town of 22,000.
“I was never going to allow a taxpayer funded bail-out of GFG,” Malinauskas said.
This is the second time that the mill has fallen into administration.
British billionaire Sanjeev Gupta’s GFG Alliance bought it off a collapsed mining company Arrium 2017. But the business has faltered again, with the mill now owing creditors including local businesses, the state government and other GFG entities about $300 million.
Albanese pledged in the 2022 election to lead a “revival of manufacturing built off the back of the availability of clean, cheap energy”.
This vision now hangs in the balance. Since 2022 Australia’s only electric car charging maker collapsed, commercialisation of green hydrogen has not progressed and the Whyalla steelworks failed to deliver on Gupta’s 2023 promise to install a $500 million electric arc furnace, despite the offer of more than $100 million in government support.
The federal opposition is blaming the government’s ambitious renewable energy goals, to raise clean energy to 82 per cent of the grid by 2030, for raising electricity prices and driving manufacturing out of business.
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Opposition energy spokesman Ted O’Brien said on Thursday that he backed the move to force the mill into administration, but slammed the government’s “fanciful idea of an all-eggs-in-one-basket renewables-only approach”, which he claimed had driven up power prices.
“The priority has to be getting back to basics, and that means having the cheapest form of energy we can get them,” O’Brien said.
Rio Tinto chief executive Jakob Stausholm, who oversees the company’s Australian aluminium production, said government support to cut energy prices were critical to manufacturing in Australia. Rio is installing a battery at its Boyne smelter in Gladstone, with backing from the Queensland government, to tap cheap solar power.
“We are slowly but surely finding solutions for our Pacific Aluminium assets, particularly in Gladstone, where we are trying to repower the Boyne smelter and create a future for the refineries and smelter there. But it’s not easy and you do need help from the government,” Stausholm said.
Power prices have soared since the Albanese government formed office in 2022, driven up by a global energy crunch following Russia’s invasion of Ukraine, causing the price of gas and coal to spike.
Opposition leader Peter Dutton has pledged to build seven nuclear plants across the country, including one at Port Augusta – about 70 kilometres from Whyalla, which he claims will cut energy bills by the mid-2040s when they are up and running.
The CSIRO and Australian Energy Market Operator have stated the cheapest form of new energy generation is renewable energy, including back up from batteries, gas, pumped hydro and including transmission lines.
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