Whyalla steelworks entered administration losing $1.5M a day under GFG

The Whyalla steelworks lost nearly $320 million in the seven months before it was tipped into administration by the South Australian government on February 19, 2025 — a pre-tax loss of $319.1 million, or 'approximately $1.5 million per day,' at a loss margin of 26.7%, administrator KordaMentha told creditors. The full extent of owner OneSteel Manufacturing's liabilities came to $1.34 billion as of February 19, 2025.

The balance sheet told a story of years of neglect: $189 million in outstanding employee entitlements, $40.2 million in unpaid water bills and mining royalties owed to the state government, $569 million owed to associated entities of parent GFG Alliance, and $437 million to trade creditors and suppliers. Administrator Sebastian Hams said the plant's state was 'definitely worse' than at Arrium's administration almost a decade earlier: 'It has been run down by a lack of investment.'

The operation was living on fumes — 'we found a position where there was $8 million in the bank,' Hams said, with the steelworks 'running on the goodwill of our employees and creditors to keep it up and running.' A lack of spending on plant maintenance meant it began 'relying on luck for safety,' after two blast furnace shutdowns in 2024 halted steel production for months. The state government advanced KordaMentha an initial $100 million to keep the steelworks operating through administration.

$1.34 billion in liabilities, including $189M employee entitlements and $40.2M unpaid water bills and royalties; $319.1M pre-tax loss in seven months.

Years of underinvestment in plant maintenance left the steelworks running in a state the administrator described as relying on luck for safety.

Two blast furnace shutdowns in 2024 halted production for months, deepening working capital constraints and shipping restrictions.

Related-party debt dominated the ledger: $569 million was owed to associated entities of parent company GFG Alliance.

Only $8 million remained in the bank, with the plant kept alive by the goodwill of employees and creditors.

Deferred maintenance is debt: a plant that skips upkeep doesn't save the money, it borrows it at compound interest from its own future.

KordaMentha received an initial $100 million from the South Australian government to keep the steelworks operating; ASX-listed BlueScope Steel was set to be appointed expert adviser, though a new long-term owner could take more than a year to land. It was unclear whether the $1.5-million-a-day losses had stopped.