Australian government officials said on Wednesday they had placed a major steelworks into administration as it struggled to repay mounting debts.
Special legislation was rushed through the South Australia state parliament that allowed receivers to take control of the Whyalla Steelworks, located 400 kilometres (250 miles) northwest of Adelaide.
The site — owned by British billionaire Sanjeev Gupta’s GFG Alliance — is one of only two Australian steelworks and produces 75 percent of Australian structural steel, government figures show.
It employs about 1,000 people, according to local media.
“The South Australian government has intervened. The steelworks is now in the hands of an administrator, who will stabilise operations and explore a possible sale to a new owner,” South Australian Premier Peter Malinauskas said.
“This is a significant step, and one we do not take lightly. But it is a necessary one to secure the long-term future of Whyalla.”
He added that “it’s not just the steelworks itself — it’s a vast number of local suppliers, small businesses owned and operated by South Australians, whose debts remain unpaid, whose revenue has evaporated, and whose livelihoods are at stake”.
“Only an intervention of this nature will protect the steelworks and its creditors.”
GFG had faced pressure to pay back tens of millions of dollars to creditors, including the South Australia government for royalties and water fees, the Sydney Morning Herald reported.
GFG Alliance — which purchased the steelworks in 2017 for Aus$700 million (US$445.6 million) — directly employs 1,000 people in Whyalla, which has a population of 22,000, the paper said.
Australian Workers’ Union secretary Paul Farrow said the country’s “economic sovereignty” hinged on the Whyalla Steelworks remaining operational.
“Without Whyalla, we will be forced to rely on China for long steel. That would be catastrophic,” he said.
GFG Alliance did not respond to a request for comment.
Australia is a minor global player in steel export markets but is the leading exporter of iron ore, most of it heading to China.
