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Gupta in taxpayer guarantee talks for Whyalla steelworks

Business

Sanjeev Gupta’s GFG Alliance has been in discussions with the State and Federal Governments over potential taxpayer support for the Whyalla steelworks, the company acknowledged today.

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The Sydney Morning Herald this morning reported that GFG Alliance had approached the federal government for financial assistance for the steelworks.

The report said Gupta’s GFG Alliance had made an informal approach to a joint Commonwealth/South Australian Whyalla taskforce about a potential public debt guarantee, following the re-election of the Morrison government in May.

Citing unnamed sources familiar with the discussions, the report says that GFG Alliance continues to pursue “a number of proposals for assistance”, although the approach had received a “lukewarm reception from the federal government to date”.

The London-based consortium bought the Arrium steelworks in 2017, saving thousands of jobs in Whyalla.

A spokesperson for the company said this morning that it had been in talks with governments about the potential need for “support” since then.

“GFG has been in discussions with the State and Federal Governments since the acquisition of Arrium from administrators in 2017, given the critical nature of the business to South Australia and the importance of steelmaking nationally,” the statement reads.

“In that time, GFG has invested significantly to stabilise the Whyalla steelworks and mining businesses. 

“Having done so, GFG is finalising its business plan and will continue to meet with governments to assess what levels of support may be required to deliver a transformation that provides a sustainable, long-term future for steelmaking in Whyalla.”     

Late last year, Gupta announced an ambitious plan for a “grand scale steel plant” in Whyalla, capable of annual exports of 10 million tonnes.

The British industrialist also outlined a $600 million expansion of Whyalla’s existing steel mill to lift production to 1.8 million tonnes each year.

Gupta suggested, in a media release published at the time, that those plans would “likely require” support from the South Australian and Federal Governments.

He made the announcements joined by Prime Minister Scott Morrison, Premier Steven Marshall and then-Leader of the Federal Opposition Bill Shorten as he spoke of his vision to grow and secure thousands of jobs.

He said at the time that when he first came to the city with a view to taking over the troubled steelworks his briefing notes suggested a rescue was not possible.

“This was the poor cousin, a broken steel town,” he said.

“But those of you who know me that’s like red rag to a bull.”

The State Government underwrote $291 million of the $660 million redevelopment of Nyrstar’s Port Pirie operations in order to keep jobs in the city.

– with AAP

 

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