Steel and lead are facing trial by fire in SA's regional cities

Whyalla's blast furnace has faced ongoing problems. (ABC News: Che Chorley) Link copiedShareShare articleThousands of jobs, billions in public money, decaying infrastructure, and a handful of hard-nosed multinational corporations. This is the bubbling cauldron confronting the South Australian cabinet, as it negotiates the future of the struggling Whyalla steelworks and Port Pirie lead smelter. The stakes are huge, and the next six months loom as make-or-break. The state and federal governments have already committed $2.6 billion (and growing) to Whyalla and its steelworks, which employ 1,100 people directly and a further 2,000 indirectly. Another sum of $135 million was committed to Nyrstar Australia to keep its smelter operations afloat in Port Pirie and Hobart, which employ 1,400 workers, with more money coming as the SA, Tasmanian, and federal governments thrash out an updated rescue package. The Port Pirie lead smelter is operated by Nyrstar. (ABC News: Trent Murphy) Both industrial facilities are aging — the smelter built in the 1880s and the steelworks in the 1960s — and both triggered government interventions on the grounds of sovereign capability. But crucially, their futures depend on the government reaching agreements with some big corporate players. Companies whose interests are not always aligned with the government's. Since stripping the Whyalla steelworks from British industrialist Sanjeev Gupta's GFG Alliance in February 2025, the state government has repeatedly said it expects to find a new owner in the second half of 2026. The number of interested buyers has been whittled down from 70 to 12 and most recently to five, according to the government, which has maintained throughout that the sale process is tracking well. But ongoing problems with the steelworks' blast furnace are a reminder of how delicate the plant's future is. The iron-producing furnace has been offline since early April, with fears now it could be permanently shuttered. "If the blast furnace is unable to be saved, then we're going to have to have obviously talks about what we do with the employees, pending the recapitalisation and the sale," Energy and Mining Minister Tom Koutsantonis said last week. The blast furnace dates back to the 1960s. (ABC News: Che Chorley) Daniel Rossetto from Adelaide University's Centre for Energy Technology said the Whyalla steelworks holds an important place in the Australian steel market, but the business was "well known" for its financial difficulties and ownership changes. Dr Rossetto, a former executive director of environmental markets at JPMorgan Chase, said he would not be surprised if there was some "slippage" in the sale timeline. "There are several complications here which are going to make it very difficult for the government to … attract a buyer that not just is able to take over the ownership of the plant but is also able to develop the plant and operate the plant in a way that's considered satisfactory by both the state government and federal government," he said. A consortium led by ASX-listed BlueScope Steel, which includes Japan's Nippon Steel, India's JSW Steel, and South Korea's POSCO, remains the only publicly disclosed bidder. But BlueScope chief executive Tania Archibald has already raised concerns about the price of gas supplying the steelworks, recently telling a mining conference that a takeover "ultimately has to make commercial sense for shareholders". BlueScope Steel CEO Tania Archibald stressed a takeover would need "to make commercial sense". (ABC Illawarra: Tim Fernandez) Dr Rossetto said the shortlisted bidders were "ultimately going to be motivated by profit as well as the long-term prospects for the business". Whyalla steelworkers are struggling to get the city's blast furnace producing iron again, with SA Premier Peter Malinauskas saying he is "very concerned" about the situation. The state government argues the profitable iron ore resources in the surrounding Middleback Ranges gave them leverage, as did Whyalla's port facility, and the $1.9 billion available to a future owner to upgrade the steelworks. "People are basically bidding to get hold of the iron ore mines, and the compulsion we're putting on them is, well, you also have to make steel," Mr Koutsantonis said. Ultimately, the public does not have much insight into how these tightly held commercial negotiations are tracking beyond what the government is publicly saying. Many questions remain, including what happens to workers if the blast furnace cannot resume production. And what exactly is the plan if the sales process ends with no buyer willing to take on the loss-making steelworks? The Port Pirie smelter already has a corporate owner, but its future has been clouded by China's efforts to consolidate critical minerals production within its borders. After Nyrstar flagged its smelters were losing tens of millions of dollars a month, the SA, Tasmanian, and federal governments

Steel and lead are facing trial by fire in SA's regional cities

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