The South Australian 2025–26 State Budget has allocated $650 million towards the $2.4 billion industry support package for the Whyalla steelworks, designed to support local jobs and stimulate growth in the state’s steel sector.
In March, Whyalla steelworks’ owner – OneSteel Manufacturing – was placed under administration amid various operational challenges at the site.
In response, the South Australian Government’s 2025–26 State Budget will contribute $650 million towards the Whyalla steelworks support package.
The state contribution will allocate:
The State Government credited its forecasted surplus of $18 million for the 2024–25 financial year for its ability to quickly help Whyalla steelworks.
“Posting three consecutive surpluses gives the (State) Government greater flexibility to respond swiftly to unexpected events, such as the Whyalla rescue and drought relief packages,” South Australian Treasurer Stephen Mullighan said.
As reported by The Australian Financial Review, Mullighan said the South Australian Government will not purchase an equity stake in a new ownership structure for Whyalla steelworks.
“That’s not what we’re planning for. We don’t want that to be the solution here,” Mullighan said.
The Association of Mining and Exploration Companies (AMEC) chief executive officer (CEO) Warren Pearce welcomed the state funding for Whyalla, but called for increased exploration expenditure following a recent downturn in Australian exploration activity.
“While the $650 million package to save Whyalla steelworks is a step that helps to sure up key infrastructure and industrial capability in the region, industry is looking for support to discover and deliver new mines,” Pearce said.
Pearce called for the South Australian Government to release its Critical Minerals Strategy, as it is the only jurisdiction to not have one. He has called for funding to aid its delivery.
AMEC is also advocating for increased funding towards the South Australian Department for Energy and Mining so it can progress the Mining Act 1971 amendments, speed up tenement administration so exploration can commence quicker, and co-fund drilling initiatives.
The South Australian Chamber of Mines and Energy (SACOME) acknowledged that the support package for Whyalla steelworks has provided short term stabilisation in the region, but said long-term stabilisation will require more investment.
“The 2025-26 State Budget highlights the significant ongoing expenditure resulting from the Whyalla steelworks being placed into administration,” SACOME CEO Rebecca Knol said.
“SACOME’s key takeaway from the 2025-26 State Budget is that no funding has been made available to progress strategic policy initiatives that the South Australian Chamber of Mines and Energy has identified as critical to growing the South Australian resources sector.”
“This signals a very challenging year ahead for the resources sector and the Department for Energy and Mining.”
Back in March, the Federal and South Australian Governments announced a $2.4 billion industry support package for Whyalla steelworks, which aims to provide immediate on the ground support, stabilise the Whyalla steelworks business, and invest in the asset’s future.
A total of $99.2 million will fund the immediate on the ground support, while $384 million will be spent to keep Whyalla steelworks operating during administration for a six-month period, which commenced on February 19.
“This ($384 million) funding is critical to ensuring workers and contractors will have ongoing work at the steelworks and will continue to be paid,” the South Australian Government said.
“Acknowledging the likelihood of an extended sale process, a further $384 million is provisioned in 2025–26 on the basis that the Commonwealth Government will agree to continue to contribute on a 50:50 basis.”
The SA and Federal Governments will also co-invest $1.9 billion in the future of Whyalla steelworks. The investment will see both governments work with the steelworks’ potential new owner to fund new upgrades and infrastructure to protect the asset’s long-term future.
“To support a new owner to invest in the necessary upgrades and new infrastructure which will be vital to ensuring the steelworks has a sustainable, long-term future,” the South Australian Government said.
“To prioritise securing the steelworks’ future, the government will defer the implementation of its Hydrogen Jobs Plan and reallocate funding for the new hydrogen production facility to this initiative.”
In light of the US tariff on steel and aluminium imports increasing from 25 per cent to 50 per cent, Mullighan said the Whyalla steelworks sale process is not likely to be impacted.
“We still remain confident that we’re going to successfully transition this into the hands of a new buyer,” Mullighan said, as reported by AFR.
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