Whyalla steelworks faces major issues and potential sale delay

New information about the Whyalla steelworks has come to light after the facility was placed into administration about a month ago. The South Australian government took this step after concerns about the steelworks' financial and physical state were raised. Detailed findings were provided by KordaMentha, the government-appointed administrator. Their report described the steelworks as being in "a state of disrepair." Occupational health and safety issues were highlighted, attributed to years of underinvestment by OneSteel Manufacturing, the former owner. KordaMentha reported serious concerns about maintenance and safety practices. Recently, urgent repairs were necessary, leading to a temporary shutdown of the blast furnace. This prompted requests for significant investment, with Energy and Mining Minister Tom Koutsantonis indicating that tens of millions of dollars will be needed for repairs and maintenance. The financial situation of the steelworks is troubling. It was losing $1.5 million a day before tax as of January 2025. Additionally, it has around $1.3 billion in debts, including $189 million owed to employees for unpaid wages and benefits. Investigations into financial practices are expected to take time as access to records has been limited. While there are multiple interested buyers, including BlueScope Steel, a sale is likely not to happen until 2026. The administration process is anticipated to last up to 18 months, focusing on stabilizing the business before finding a new owner. KordaMentha is asking for an extension to gather more information for the crucial upcoming meeting with creditors, which will determine the company’s future.