In the winter of 2024, workers on the night shift at the Whyalla Steelworks learned to dread a text message more than a siren. Twice that year the blast furnace that had run since the 1960s went cold: once when a routine 48-hour maintenance job spiralled into a three-month shutdown after molten metal solidified inside it, and again in August when the mill ran out of the coking coal it needed to keep burning. Rosters were cut, overtime vanished, and rumours about unpaid entitlements moved faster than management's reassurances. Whyalla is a company town of about 21,000 people (2021 Census, approx.) built around that furnace since the 1940s, when the pipeline that carries Murray River water across the desert was first laid to keep it running. By early 2025, the state government's own Steel Taskforce had concluded that the mill's owner was not merely struggling — it was sliding toward a collapse that could take the town's largest employer down with it.
That mill is bigger than Whyalla's pay packets. It is one of only two integrated steelworks left in Australia, the country's sole maker of rail, and the source of roughly 75% of the nation's structural steel (approx.) — the beams and girders that go into bridges, high-rises and rail lines. It has already died once, as Arrium, in 2016. Its rescue the following year by the British-based GFG Alliance, run by metals financier Sanjeev Gupta, was meant to be a fresh start. Instead it put a business with a long record of missed payments in charge of a facility the country could not easily replace. On 19 February 2025, the Malinauskas Government decided it could not afford to wait and see whether GFG would fail again on its own terms — and moved first, using a power almost no other Australian government has needed to use on a single company.
What the government did
On the afternoon of 19 February 2025, the South Australian Parliament suspended its standing orders and passed the Whyalla Steel Works (Charge on Property) Amendment Act 2025 within minutes, without advance public warning. The bill amended the 1958 Act governing the site to give the state a first-ranking legal charge over the company's South Australian property for any debt it owed the Crown, and empowered the responsible minister to demand the company's financial records within days. GFG's local entity, OneSteel Manufacturing Pty Ltd, was placed into administration that same day, with KordaMentha — the firm that had wound up the mill's previous owner, Arrium, in 2016 — installed as administrator. Premier Peter Malinauskas told Parliament the amendment was "surgical in nature," and later said the speed and secrecy were deliberate: GFG was not told in advance, to stop the company moving assets or resisting the takeover before it happened.
The following day, Malinauskas appeared with Prime Minister Anthony Albanese and Industry Minister Ed Husic to announce a $2.4 billion joint state-federal package (approx.): about $384 million in immediate, co-funded operational support to keep the furnace running and workers paid through administration, and roughly $1.9 billion earmarked for long-term investment in the site's future — split, on the SA Auditor-General's figures, at roughly $1.7 billion from the Commonwealth and $650 million from South Australia (approx.) — plus a new national Green Iron Fund for other producers. Malinauskas was explicit about where the line sat: "I was never going to allow a taxpayer-funded bail-out of GFG," he said; the money went to the business under new administration, not to Gupta. What administrators found once they had access to the books underlined why the takeover had been urgent: Liberty's Whyalla entities owed more than $300 million (approx.), including a $15 million unpaid water bill to SA Water and unpaid royalties to the state government, and both of the mill's rail-haulage contractors, Aurizon and Pacific National, had already stopped serving the site over non-payment. By 28 February 2025, total creditor claims against the company had reached roughly $1 billion (approx.), about half of it claimed by GFG's own related entities — a sign of how tangled the company's internal finances had become.
Administration was never meant to be permanent. Later in 2025, KordaMentha and sale advisers 333 Capital opened a formal process to find a new owner, drawing more than 70 initial expressions of interest and five binding bids by early 2026. By mid-2026 that had narrowed to two shortlisted bidders, with a consortium led by BlueScope — alongside Nippon Steel, POSCO and JSW — the reported frontrunner, holding a right to match any rival offer. Government figures had pointed to finding a buyer by around August 2026 (approx.); as that deadline nears, the mill is still, in effect, run by the state through its appointed administrator, more than a year after the takeover.
The strongest case
Waiting for GFG to fail on its own terms would likely have cost the furnace, the jobs and the country's steel capability for good
The strongest argument for what the Malinauskas Government did is what it avoided. An ordinary corporate collapse under the Corporations Act would have handed early control to GFG's own restructuring advisers and a web of related-party creditors — the same corporate family whose parent has been under UK Serious Fraud Office investigation since May 2022 over suspected fraud linked to the 2021 collapse of its financier, Greensill Capital. There was no guarantee a conventional administration would keep the blast furnace hot while that process played out, and once such a furnace goes fully cold without being deliberately relined and restarted, relighting it can become commercially unviable — effectively ending steelmaking at the site. By legislating a first-ranking charge and moving in an afternoon, without warning GFG, the government installed KordaMentha — the firm that had already sold Arrium's businesses successfully once before — ahead of any move by Gupta's side, protecting roughly 1,100 direct jobs and an estimated 2,000 more in flow-on employment (approx.) in a town where steelmaking and mining support close to a fifth of the workforce. It also limited damage to a wider supply chain already exposed to GFG's collapse: mining services contractor NRW Holdings alone had around $113 million in exposure (approx.). Malinauskas's insistence that the rescue was "an investment," not a bail-out of Gupta, reflects a genuine distinction: the target of the intervention was the asset and the people who depend on it, not the owner who had run it down.
The evidence
The scale of what the state inherited, and what it has since spent, is now on the public record. GFG's debts at the point of takeover, the size of the rescue package, and its effect on the state's own budget bookend the case for and against how the crisis was handled.
The Auditor-General's November 2025 assessment of the state's finances is the clearest primary-source evidence that the rescue carries a real budget cost, not just a headline one: it found the state's net operating balance had fallen $230 million short of the figure in the original 2024-25 Budget, attributing the shortfall mainly to the Whyalla support package alongside higher SA Health costs. That was before the sale had even been finalised. By February 2026, a full year after the original $2.4 billion figure was announced, the SA Treasurer was citing a combined commitment closer to $2.6 billion (approx.), including a further $275 million (approx.) to keep the mill operating while the sale process dragged on — evidence that the final bill was still moving upward, not settled, some twelve months after the emergency was declared over.
The critique
The case against the government's handling is not that it acted in February 2025 — it is that it took so long to get there. GFG's difficulties were not a surprise: the company had been asking the state for loan support since at least 2019 or 2020, and in 2021 the then-Marshall Liberal Government struck a $50 million dollar-for-dollar grant scheme (approx.) meant to help fund efficiency upgrades at the mill. Greensill Capital, GFG's principal financier, collapsed in March 2021, leaving the group with a reported global funding exposure of roughly $5 billion (approx.) and no clear replacement lender. The UK's Serious Fraud Office opened a formal criminal investigation in May 2022. Through all of that — under the Marshall Government and, from March 2022, under Malinauskas — GFG remained in charge of a facility of genuine national importance, with the state's own Steel Taskforce watching its finances "deteriorate" for months before the government finally acted. Roughly four years passed between Greensill's collapse, the clearest early warning sign, and the emergency legislation that took the keys away. A mill this important to national steel capability arguably should not have been left in the hands of one financially troubled private owner for that long, regardless of which party held office in Adelaide.
The other half of the critique is about cost and who ultimately carries it. What was announced as a $2.4 billion package in February 2025 had grown to a reported $2.6 billion (approx.) within a year, and the Auditor-General has already confirmed a measurable hit to the state's own operating balance. Yet as the sale process nears its 2026 deadline, SA Treasurer Tom Koutsantonis has been explicit that South Australia does not see itself as the ultimate backstop if the sale falls through, arguing in February 2026 that responsibility should sit with the Commonwealth because, in his words, taxpayers in a state of 1.6 million people cannot be asked to underwrite a country of 30 million. That may be a reasonable point about fiscal capacity, but it also means that, more than a year after taking control, neither government has stated clearly who pays, or how much, if the leading bidder walks away. The February 2025 creditor claims — roughly $1 billion in total, about half of it from GFG's own related entities — are a reminder of how opaque the company's internal dealings had become, and how much of that complexity the state, not GFG, is now working through at public expense.
There is also a tension in the transition plan itself. South Australia has built its energy reputation on renewable leadership, and an earlier version of Whyalla's future — a green hydrogen-fuelled plant — was shelved as the steelworks crisis absorbed government attention and funding. The operational plan now emerging under administration reportedly leans on gas rather than renewable hydrogen to decarbonise steelmaking; the independent think tank Climate Energy Finance warned in a November 2025 report that a gas-led path, reliant on supply from Santos, could add roughly $2 billion in extra cost (approx.) compared with a renewables-led alternative — a claim from a clearly non-government source that the government has not itself confirmed, but one that goes to whether the eventual buyer can deliver the low-emissions steelworks the funding package was sold on.
Malinauskas said he would never bail out GFG — but it took roughly four years of grants, loans and forbearance, and one collapsed blast furnace, before the state finally took the keys away.
The risk to the future
A sale that still isn't signed, and no agreed answer for who pays if it fails
The most immediate risk is that the administration outlasts its purpose. With the sale process narrowed to two bidders and a target date around August 2026 (approx.), a collapsed deal or a further delay would leave KordaMentha — and the public money funding it — running the mill indefinitely, with the Treasurer already on record arguing the Commonwealth, not South Australia, should carry that cost. If federal and state governments cannot agree who backstops a failed sale, the town that was protected in February 2025 could still face the uncertainty the takeover was meant to end. The second risk is structural rather than immediate: having spent more than $2.6 billion (approx.) and over a year extracting the mill from one financially fragile private owner, the state is now hoping to hand it to another private owner, chosen through a competitive process, with no public guarantee against a repeat. Nothing in the record so far — the size of GFG's debts, the years it took regulators and governments to act, or the unresolved gap between the renewable-powered future once promised for Whyalla and the gas-reliant plan reportedly being costed now — suggests that a single-owner steelworks in a single-industry town is a risk Australia has actually retired. For now, it has only been refinanced.