Australia provides $1.5 billion aid package to Gupta’s Wyalusing steel mill

The announcement of the aid comes after the plant was placed under temporary administration

Australian Prime Minister Anthony Albanese has announced a joint state and federal support package for the Wyalla steel plant owned by Sajiv Gupta’s GFG Alliance worth A$2.4 billion ($1.5 billion). This was reported by ABC (Australian Broadcasting Corporation).

The aid was announced the day after the company was forced to go into receivership due to unpaid debts.

“There is no more important industry to our country than steel production, and here in Wyalla, 75% of Australia’s structural steel is produced,” Albanese said at a press conference.

The support package is divided into immediate, short-term and long-term costs and will be jointly funded by the state and federal governments.

Its first component includes A$100 million for what the federal government has called “on-the-ground” support in Wyalla, including A$50 million for payments to creditors and almost A$33 million for infrastructure upgrades.

Another 384 million will help keep the plant and jobs afloat during administration, ensuring that workers and contractors will have permanent jobs at the plant and continue to receive paychecks.

The majority of the funds – A$1.9 billion – have been earmarked for new infrastructure under the new ownership, which the government says is vital to ensuring the plant’s sustainable, long-term future.

Anthony Albanese also said that the government has created a A$1 billion green iron investment fund, up to half of which will go to the Wyalla plant, with the rest also available for other projects.

Gupta’s Wyalla smelter, which has an annual production capacity of 1.2 million tons, faced a series of unplanned maintenance outages last year, Bloomberg reminds.

Earlier, South Australian Prime Minister Peter Malinauskas said he was talking to companies, including Bluescope Steel Ltd. to take control of the company. According to him, it will not be a “quick transition”. According to Malinauskas, GFG’s debt to creditors is at least A$300 million.

Last week, GFG Alliance Executive Chairman and Liberty Steel Group CEO Sajiv Gupta said in a statement that the company was in the process of actively finalizing new financing for the Wyalla steel plant. The announcement came shortly after the South Australian government revealed that GFG owes it about $15 million for water, in addition to large debts to contractors working at the plant and unpaid mining royalties.