What Lies Ahead for Liberty’s Steel Plant in Whyalla?
The Guardian reported that the mood in the South Australian city Whyalla is one of cautious optimism, after steelworks in Whyalla has been hit by the
The Guardian reported that the mood in the South Australian city Whyalla is one of cautious optimism, after steelworks in Whyalla has been hit by the collapse of Greensill Capital. The city has faced existential threats to its iron ore and steelmaking industries for decades, even before the Whyalla wipe out moment. Whyalla endured. But in 2016 the steelworks owner Arrium went bust. Employees volunteered for a 10% pay cut to make it a more attractive sale proposition and it worked. Mr Sanjeev Gupta, head of GFG Alliance, rode into town in 2017. He bought Arrium, saving thousands of jobs. Some people thought it was a saviour story, others that it was too good to be true. The big talk about green steel and renewables that Mr Gupta would fund provoked both relieved and sceptical reactions. There has been simmering suspicion about GFG’s financial foundation. But Whyalla people proverbially roll their eyes at the idea of their imminent demise. They’ve seen it all before.
The Australian Workers’ Union says the mood is one of very, very cautious optimism. Its South Australian branch secretary, Mr Peter Lamps, says that naturally the community and the workers are worried. But that worry is tempered by some hard numbers. In 2016 the industry was in fairly dire straits but since then the market has picked up. Mineral prices have boomed, work orders are flowing in and the place is making a profit. The order books are full
Source says the steelworks is so profitable now that even if Gupta completely withdraws, someone else will pick it up. Others say both state and federal governments are being diplomatic for now, but might change their tunes if the UK contagion of financial failure spread here. But the general vibe is that Whyalla has enough natural and human resources to be protected from the chaos in the UK.
Now, Australian Financial Review reported that Mr Sanjeev Gupta’s GFG Alliance is understood to be in talks to secure about AUD 500 million in new funding for its steel manufacturing operations at Whyalla.