Contributed 

The threatened closure of South Australia’s Whyalla steelworks must be prevented for two reasons. The ability to produce steel products is a key strategic industry because these products are essential ingredients for many of the products we use. A healthy steel industry is essential to the rebuilding of Australia’s manufacturing base, and this is essential for the nation’s future economic prosperity.

It makes no sense to dig up iron ore, sell it overseas to be processed, and then buy back the steel products. Australia is best served by cutting out the middleman. Governments have for a long time been presiding over the closure of one steel works after another. This has not been in Australia’s interests, contributed to the loss of jobs, and the devastation of local economies. Those who worked and lived there have good reason for feeling betrayed.

Whyalla is a special case. Unions, those working in the steel works, and their community, with the backing of unions have waged along campaign to save their steelworks. The state government eventually saw the wisdom of changing the Whyalla steelworks Act of 1958 to clear he fog over who is the owner.

The Act, designed to encourage investors, put a fog over this important question. This is what happened under this cover. One Steel, the company running the works went into receivership in February. It was not profitable for the shareholders on the books. The reality is that One Steel is a subsidiary of the British based GFG alliance, which happens to be in partnership with the smaller FKG Group, owned and controlled by the Gardner Family.

Given what looks like a complex structure largely absolving the parent companies from responsibility and the cost of failure, is a problem. Adding to the complication is that the associated Whyalla port is also facing closure. It is owned by Whyalla Port Pty Ltd, which itself is a subsidiary of One Steel.

The rationale for the steelworks going into receivership is that the previous owners had neglected maintenance, and there is a problem that the lease for the ort was give not the subsidiary without consent from the government. It appears there is a conflict of interest here, and the lease is illegal. The reality is that the port alone carries $200 million worth of assets and a slice over iron ore exports to other countries. An incentive to eliminate one subsidiary and close the steelworks to increase the bottom line exists.

South Australia’s state government shows no inclination to take over the port. Although illegal, it accepts that it operates Whyalla Port. There is no market solution through a new owner. No one is showing interest in buying in.

There is a solid case for government intervention into both the steelworks and the port, and therefore, for a change to the law preventing this. This control should be expanded to direct government ownership, whether it be in the form of a partnership or going alone. Changing the Act to allow government intervention deserves support.