GFG Alliance, the owner of Whyalla Steelworks, is reportedly behind on approximately $15 million in unpaid water bills to the South Australian government. This information was shared by Tammie Pribanic, the head of the South Australian Treasury Department, during a recent appearance before the state parliament’s Budget and Finance Committee. She highlighted concerns regarding the financial stability of the steelworks, noting that GFG had also not made any royalty payments this financial year, alongside their outstanding debts to SA Water.
This financial situation follows a challenging period in 2024 for the Whyalla Steelworks, which included two extended shutdowns of the blast furnace, halting steel production and resulting in significant financial losses for GFG. Ms. Pribanic confirmed that while GFG had met its obligations on payroll tax, land tax, and emergency services levy payments, it had not settled any outstanding SA Water bills since at least August.
The South Australian government is keeping a close eye on the situation, and Ms. Pribanic admitted there were concerns about the steelworks’ ability to pay its creditors. Although the state government cannot easily access the financial records of a private company like GFG, they are aware of the significant debts the company owes to local contractors, which add up to tens of millions of dollars. Premier Peter Malinauskas noted that while plans are in place for various outcomes, the government does not have full visibility into GFG’s financial situation and cannot predict its next steps.
The government has expressed its reluctance to force the steelworks into administration, as it would have major consequences for the workforce and other industries dependent on the plant. While some South Australian politicians, like Senator Rex Patrick, have suggested putting the steelworks into administration, the government has refrained from taking public positions on the matter. Minister for Energy and Mining Tom Koutsantonis emphasized the need for GFG to pay its debts on time but also acknowledged that the government has prepared contingency plans in case of further complications.
One of the most pressing concerns is GFG’s plans to transition the steelworks to greener operations, with a significant investment in a Direct Reduced Iron (DRI) plant powered by green hydrogen and natural gas, along with an electric arc furnace. Ms. Pribanic indicated that the cost of these projects could run into billions of dollars, and in the current financial climate, it would be difficult for GFG to finance them without government support.
Opposition leader Vincent Tarzia has raised alarms over the mounting debts and the state of the Whyalla steelworks, suggesting that the situation could worsen if GFG doesn’t pay its dues soon. The ongoing financial challenges, combined with the high cost of GFG’s planned green transformation, have raised serious questions about the future of the steelworks and its financial viability.