Whyalla Steelworks secured with $2.4 billion investment to protect jobs and drive green steel transition

The Federal and South Australian governments have committed $2.4 billion to secure the future of the Whyalla Steelworks, a critical asset for Australia’s manufacturing, infrastructure, and national security. The funding aims to stabilise the steelworks, protect thousands of jobs, and transition operations toward green steel production.

Prime Minister Anthony Albanese and South Australian Premier Peter Malinauskas announced the package in Whyalla today, securing the facility’s role in maintaining Australia’s manufacturing independence. The Whyalla steelworks is the nation’s only producer of long steel products, essential for infrastructure projects and defence capabilities.

Investment Breakdown and Immediate Action

The rescue package includes three components: $100 million for immediate support, $384 million to stabilise operations during administration, and $1.9 billion for long-term upgrades. Immediate measures include creditor assistance, infrastructure improvements, and the establishment of a jobs and skills hub to support workers.

A joint federal and state taskforce will oversee the transition, working with administrators, creditors, and the local community. KordaMentha has been appointed as the administrator, following the state government’s decision to place the steelworks into administration to ensure its sustainability.

Premier Malinauskas explained, “Locally-made steel is vital to South Australia and Australia’s future, and this unprecedented investment recognises the importance of the Whyalla Steelworks."

Safeguarding Sovereignty and National Security

A report by the McKell Institute highlights the national importance of the Whyalla Steelworks, warning that its failure would leave Australia reliant on Chinese imports for long steel products. Such dependency, the report argues, could expose Australia to supply chain vulnerabilities and coercion from strategic adversaries.

“Australia’s defence capacity and national security depend on the Whyalla Steelworks – its output means Australia can better respond to strategic emergencies, is less exposed to supply chain disruptions, and can resist coercion by adversarial trading partners,” said Ed Cavanough, CEO of the McKell Institute.

"If the federal government’s Future Made in Australia strategy is to mean anything then Australia must be able to produce its own long steel. Without it our sovereign capability is basically worthless."

Currently, Whyalla steel produces 75% of Australia’s structural steel and plays a key role in projects ranging from railways and bridges to defence infrastructure. The McKell Institute report also highlighted that re-establishing such a facility in the future would be nearly impossible due to the specialised skills concentrated in the Whyalla region.

Preparing for a Green Steel Future

Importantly, the package includes a focus on transitioning Whyalla to green steel production, aligning with global efforts to decarbonise the steel industry. The federal government has announced a Green Iron Investment Fund, allocating $500 million to support projects that move toward lower-emission manufacturing methods.

The Australian Conservation Foundation have welcomed the investment, after years of lobbying for targeted government investment in the decarbonisation of Australia’s metals sector.

“Decarbonising Australia’s existing iron and steel production facilities, while developing new green steel projects, is critical for Australia to establish itself in the net zero global economy and make a significant contribution to reducing our climate pollution," Australian Conservation Foundation’s climate policy adviser Annika Reynolds said.

“If Australia decarbonised our iron and steel production and retained more of our iron ore onshore to smelt it here before exporting it as green steel, it could cut global emissions by as much as 4%."

Broader Implications for Australia’s Economy

Whyalla’s importance extends beyond the local community. Its products are crucial to public infrastructure projects, the manufacturing sector, and housing initiatives. The facility’s preservation is seen as a cornerstone of the federal government’s Future Made in Australia strategy, which prioritises domestic manufacturing and reducing reliance on imports.

Minister for Industry and Science Ed Husic echoed this sentiment: “Making more things here means making more steel in Whyalla. Steel-making has provided spine to Australian industry for a century, and it’s here to stay. We want a strong future for Australian steel making, and Whyalla will help deliver that.”