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Win-win for Whyalla as major parties announce projects to boost steel city

Business

Announcements today of a major steel contract and a Labor pledge to build a $593 million hydrogen plant in Whyalla has the local council confident its economy has “a far more stable, secure future”.

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The federal government announced this morning that Whyalla workers will produce 147,000 tonnes of steel for key rail projects across Australia, including more than 110,000 tonnes for the remaining sections of Inland Rail project.

Australian Rail Track Corporation has signed a $292 million contract with Liberty Primary Steel to supply the heavy-duty rail, supporting 1500 jobs in the South Australian town.

The announcement coincides with an announcement by SA Labor today that Whyalla is the preferred location for the $593 million Hydrogen Power Station it plans to build if it wins this month’s state election.

The project, which forms the centrepiece of Labor’s energy policy, was first flagged as an election promise in March last year but no location was revealed at the time.

Whyalla Mayor Clare McLaughlin said the long-term steel contract was another sign of the strengthening future of the operations.

She said the hydrogen project could be “game-changing” for Whyalla’s future.

“This project would create the long-awaited diversification of our economy and give us a far more stable, secure future,” McLaughlin said.

“These large-scale projects would also lead to a growing Whyalla population, more jobs and increased education pathways.

“Over the next decade, we believe Whyalla can be at the epicentre of global green hydrogen development, helping Australia achieve net zero emissions by 2050.”

The State Opposition said it had received a “comprehensive submission” from the City of Whyalla to host the hydrogen project, with the area chosen due to its status as a “large industrial city” with a “highly trained workforce and service industry”.

Labor says the project – consisting of a 200MW hydrogen power station, 250MWe worth of hydrogen electrolysers and a hydrogen storage facility – will create up to 300 jobs during construction and 900 jobs through the creation of a hydrogen export industry.

McLaughlin said the hydrogen announcement aligned perfectly with the city’s other major industry – the Whyalla Steelworks.

“We know Sanjeev Gupta and his GFG Alliance Whyalla team are pushing ahead to use green hydrogen to produce green steel here in Whyalla, so this plant would help make that a more feasible opportunity,” she said.

“This would be an evolutionary step for heavy industry and Whyalla, significantly improving environmental outcomes while equating to better standards of living, improved essential services and vastly improved amenities.

“Other businesses will also likely seek to relocate their operations to Whyalla to more easily access green hydrogen and strengthen their green credentials.”

State Opposition leader Peter Malinauskas said Whyalla was “the perfect location for our Hydrogen Power Station, given its prime location, proximity to key infrastructure and diverse skills base”.

“South Australia already has a strong reputation for leading Australia and the world when it comes to renewable energy – and this is our next big leap forward,” he said.

In March 2021, Citibank launched court action on behalf of Credit Suisse Asset Management to wind up the operations of GFG’s LIBERTY Primary Metals Australia, including the Whyalla Steelworks and a coking coal mine in NSW.

However, GFG Alliance announced in October it had agreed to a debt restructuring plan for its Australian operations, ending six months of uncertainty around the plant’s future.

When completed in 2027, the Inland Rail will provide a freight connection linking Melbourne and Brisbane in a route through regional Victoria, NSW and Queensland.

Finance Minister Simon Birmingham said the multi-million-dollar contract would be an enormous boost for Whyalla, delivering a pipeline of jobs and economic activity.

“South Australian-made steel is among the highest quality in the world, which makes it only right for it to be used for the construction of Inland Rail and our national freight network,” he said.

Liberty Primary Steel has previously supplied steel for Inland Rail, including contracts worth $51 million for the Parkes to Narromine and Narrabri to North Star sections.

UK-based Sanjeev Gupta was hailed a saviour of the Whyalla business and town after former steelworks owner Arrium went into administration and he took it over in 2017, vowing to improve and expand the operation.

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