It took just minutes for surprise laws to be introduced to the South Australian Parliament and pass both houses giving the state government the power to send the Whyalla Steelworks into administration.

The deft procedure on Wednesday was required so that GFG Alliance owner and billionaire industrialist Sanjeev Gupta was not alerted to the government’s long-awaited action on the struggling steel plant.

The law changes were “surgical”, SA Premier Peter Malinauskas said, and offered employees of the steelworks and the broader Whyalla community “certainty”.

But it’s a move that’s likely without precedent and precedes the announcement of what Malinauskas has described as “one of the most comprehensive industry support packages that this nation has ever seen”.

Later on Wednesday, Malinauskas flew to Whyalla to meet community members. On Thursday, alongside Prime Minister Anthony Albanese, he will reveal his grand plan.

In the meantime, here’s what you need to know about the evolving situation:

Who owns the Steelworks?

Not Gupta. He doesn’t even run it anymore.

The government’s unprecedented move meant administrator KordaMentha was appointed to run the business.

KordaMentha took over from the Steelworks’ direct owner and GFG Subsidiary OneSteel Manufacturing using Corporations Act mechanisms.

The firm will investigate options, including the potential sale of the business, and will ensure the steelworks keep operating.

It’s not KordaMentha’s first rodeo with the steelworks either: The company ran the administration of the business when Arrium collapsed last decade.

This means staff and contractors will get paid, and debts incurred while the steelworks keeps running will be paid.

How did this all happen?

It’s a long story. Here’s a brief timeline.

July 2017 –

• Whyalla steelmaker Arrium is sold to London-based consortium GFG Alliance, ending 15 months of uncertainty since the town’s main employer fell into voluntary administration.

March 2024 – Blast furnace offline

• The steelworks blast furnace goes offline after it went too cold during a two-day maintenance shutdown.

May 2024 – Repair setbacks

• An uncontrolled iron breakout during repairs that damaged the furnace’s external shell causes “hundreds if not up to a thousand workers” to be placed on a reduced shift schedule without pay.
• 56 jobs are cut from GFG mining contractors.
• The shell is later repaired with hot metal flowing from the smaller capacity emergency taphole.

Jul 2024 – Workers return

• Workers in power and services, maintenance and steelmaking divisions begin “progressively transition to their regular shift rosters”.
• The first steel rolls off the production line as the blast furnace recovery operation is complete.

August 2024 – Contractors owed thousands

• Numerous sources reveal that contractors who supply services to the steelworks are owed tens of thousands of dollars.
• Some businesses say they may be forced to lay off staff or go into liquidation if the situation does not improve.
• A string of shutdowns starts amid problems sourcing enough coking coal.

September 2024 – Govt seeks advice

• Up to 116 jobs to be cut at mining operations connected to GFG as it enters the next planned phase of its hematite iron ore ramp down, shifting its focus to mining magnetite ore.
• SA Energy and Mining Minister Tom Koutsantonis confirms that the government is taking advice from a procurement activity report that details what to do if the Whyalla Steelworks falls into administration for a second time in a decade.

Nov 2024 – Whyalla­­­­ City Council fast-track uplifting projects 

• Whyalla­­­­ City Council announced it will fast-track several projects in the area to try to make up for work lost due to its troubled steelworks.
• The plans include a $1 million investment across Whyalla’s Civic Park and foreshore to create economic, visible, and emotional uplift for the community.

Jan 2025 – 

• The blast furnace casts its first steel following the four-month shutdown.
• GFG manufacturing officer Theuns Victor warns the furnace is “running at half its capacity with a number of issues yet to be resolved”.
• Gupta speaks in-depth about the company’s rough 2024, declaring it “probably the most difficult year … in the steel industry” he’d seen in his 33 years in the business on the in-house podcast Steel Town.

Feb 2025 – Government lifts pressure on growing debt

• The South Australian government calls on GFG Alliance and Gupta to pay up the “tens of millions” of dollars owed to creditors and outstanding royalties.
• GFG’s unpaid water bill of $15 million is revealed in Parliament.
• GFG reaches an agreement to settle all debts claimed by parties responsible for the main creditors of collapsed financier Greensill Capital.

How did this all happen on Wednesday?

What a morning.

News broke that special legislation had been introduced, then passed, to place the steelworks into administration about 11.30am.

The legislation – which Malinauskas described as “surgical” – was an alteration to the Whyalla Steel Works Act 1958.

The government said the amendment made GFG’s debts to the state government apply as a charge across all, rather than some, of the real property of One Steel, and made them readily enforceable.

“The purpose of that amendment was discrete. The amendment itself was surgical in nature,” Malinauskas said.

“The first is to give the state rights to be able to enter the steelworks to perform functions such as basic inspections.

“The second is to get definitively a right to have access to the accounts of the operator of the steelworks.

“Tthe third is to provide the South Australian government a first charge over debts that are owed to the South Australian government … Subsequently, following the passage of that legislation, the South Australian government had the option of putting the operator of the steelworks into administration.”

Why did the government choose to place the company into administration?

Companies go into administration every day in Australia. Usually, this is because the business is no longer able to cover its debts.

The Whyalla Steelworks’ debts, to the state and to sub-contractors and suppliers, have been widely reported. For instance, it owes SA Water about $15 million and the government generally “tens of millions of dollars”.

On Wednesday, Malinauskas said advice from his steel taskforce was that “the owner of the steelworks’ financial position wasn’t just deteriorating, it was likely to continue deteriorating in the future”.

“More than that, it was compromising the very operations of the steelworks itself,” he said.

“That advice completely accords with all of the information that we are receiving on the ground from people who work within the steelworks, workers, their representatives, their various unions, but also critically: Contractors.

“Given the state of the steelworks was going from bad to worse, and the finances of its owner were compromised, it ran the very real risk that every week and month [that] went by the owner of the steelworks was not able to invest in its operations appropriately.

“It was approaching a point where it would be irredeemable. That is unsatisfactory, that invites government intervention.”

Will the government take over the steelworks?

No.

Well, that’s what Malinauskas said, for now.

“We aren’t contemplating the South Australian government will be nationalising the entirety of the steelworks,” he said.

How will the government get its money back?

Through the administration process, it hopes. After selling the steelworks, KordaMentha will disburse those funds to creditors equally.

Usually, creditors get less than what they’re owed through this process, but Malinauskas said the approach was fairer for all.

What does Sanjeev think about all of this?

We aren’t sure. He’s gone quiet.

What happens next?

KordaMentha has seven days to call its first meeting of creditors of the Whyalla Steelworks.

Malinauskas said KordaMentha was “fully funded”, which is an interesting term that doesn’t usually pop up in administrations. More would be revealed on Thursday, he said.

Beyond that, Malinauskas has promised “one of the most comprehensive industry support packages that this nation has ever seen”.

While details are yet to come, it might have something to do with about $600 million earmarked for the government’s green hydrogen project, which was directly tied to the steelworks’ success. Another $50 million was put aside to potentially bail out GFG, but that was also never spent.

Alongside Albanese, Malinauskas will reveal his plans for the steel industry’s future.

We’ll have to wait and see what happens.