Wiping off Whyalla has become something of a macabre sport.
All manner of things have been said to be about to destroy the steelworks town, including (briefly) the 2012-2014 carbon price.
BHP abandoned the steelworks, the harbour and the nearly Middleback Range iron ore mine in 2000 floating it off as a separate company it called OneSteel.
Renamed Arrium, the company collapsed in 2016, in circumstances that are still being fought out in court.
Bought in July 2017 by Dubai-based British industrialist Sanjeev Gupta, the steelworks enjoyed a revival until this month, with an exclusive contract to supply steel for the planned eastern inland rail line and plans to make 100% “green steel” from renewable energy sources.
Two of Gupta’s companies, including OneSteel Manufacturing which runs Whyalla’s steelworks, were hit with windup applications last week, following the collapse of their major financier Greensill Capital.David Mariuz/AAP
The withdrawal of finance has once more thrown into doubt the future of South Australia’s fourth-biggest town and its 22,0000 residents, including the 1,800 directly employed in the steelworks and the thousands more who depend on it.
Also in jeopardy is a planned A$600 million upgrade to the steelworks along with a related A$350 million investment in the nearby Cultana Solar Farm that was estimated to create 350 jobs in the construction phase and 10 to 15 ongoing jobs.
Gupta says he has been working tirelessly to secure refinancing for the $US5 billion he owes Greensill, and in an open letter has described Whyalla as his “spiritual home”.
The Morrison Government is said to be considering a “back-up plan” (presumably some form of bridging finance). The South Australian government is offering A$50 million on the condition it is not used to pay down debt.
The steelworks appears to be profitable following a turnaround in the past 18 months. The contract for the inland rail project is worth $10 billion.
The impact of COVID-19 on demand for steel has been a negative, but at the same time the pandemic has shone light on Australia’s weak supply chains and stimulated rethinking about the need for local manufacturing using local steel.
But steel can’t be the only key to Whyalla’s future. That locals are still talking as if it could be, reflects a deep-seated inertia.
Unlike the larger steel cities of Newcastle, Port Kembla and Wollongong, Whyalla has been very slow to respond to the need for change.
Fortunately, the opportunity remains open. Whyalla has open space, 300 days of sunshine well suited to solar energy (potentially lowering costs for new and existing businesses) and a new A$100 secondary school situated between a university campus and a TAFE Technical Institute.