Department of State Development

14 Jun 2016 Resources

State Government commits $50 million to ensure future of Whyalla steelworks

The State Government today committed $50 million to support a new owner of the Whyalla steelworks.

The funding will be placed in a facility that can only be accessed by a new owner if it is used to support the operations at Whyalla.

In Parliament Premier Jay Weatherill called for a bipartisan commitment from both major parties federally to contribute $100 million towards the funding facility to give the Whyalla steelworks the best chances of a long-term future.

This would mean the total funding facility being offered to a new purchaser would be $150 million. The investment would support the long-term sustainability of steel-making at Arrium and maintain the company’s operations in South Australia.

The facility will be allocated to technological efficiencies or upgrades in the Whyalla operations, to ensure that tax-payer money is spent to benefit the thousands of jobs at Arrium and in the wider supply chain.


Arrium entered voluntary administration in April after a sustained period of low commodity prices and the dumping of cheap, low-quality foreign steel in the Australian market.

Both the Premier and Treasurer have travelled to Whyalla to meet with Arrium staff, the Administrator, local Arrium suppliers and community groups.

To support Arrium suppliers the $10 million Whyalla Small Business Loan Scheme was launched last month to support small businesses experiencing cash-flow challenges as a result of Arrium entering administration. Under the scheme interest-free loans of up to $750,000 are available to South Australian businesses that supply Arrium.

As of yesterday afternoon, 13 formal applications for assistance have been received and a further nine companies are in the process of applying.

Seven loans totalling nearly $3m have been approved with many others very close to finalisation.

Quotes attributable to Premier Jay Weatherill

The Arrium operations at Whyalla are critical to both South Australia and the nation as a whole – it is essential that we retain our sovereign steel-making capability.

I have written to the leaders of both major parties outlining our proposal to create a $150 million funding facility to be accessed by a future purchaser of the Whyalla steelworks.

Given the national importance of this industry we expect a commitment from Mr Shorten and Mr Turnbull to back the proposed joint State-Commonwealth funding assistance package.

Quotes attributable to Treasurer Tom Koutsantonis

The State Government’s Steel Taskforce has been working tirelessly with Arrium and the Administrator to determine what tax-payer assistance will give the Whyalla steelworks the best chance of viability over the long term.

Choosing winners in terms of what types of technological upgrades to back is not an option, because each potential future buyer has different requirements.

This funding facility proposal provides flexibility to potential future buyers while at the same time ensuring that the money stays in Whyalla to support the continued operation of the plant.

Quotes attributable to Member for Giles Eddie Hughes

Standing by and allowing the Whyalla steelworks to close is not an option – the result would be devastating for the community of Whyalla.

The Arrium administration affects the whole of Australia, and what we want to see now is a commitment from both sides federally to back the steelworks and ensure that this country continues to make its own steel.