The Whyalla Steelworks in South Australia is facing financial difficulties, with reports of delayed payments to suppliers and staff cuts amid a global downturn in steel prices. GFG Alliance, the company that owns the steelworks, is struggling with massive debts owed to creditors of collapsed Australian financier Greensill.
Already a subscriber?The Whyalla Steelworks has begun falling behind on payments to suppliers at the same time as it cuts staff and faces falling steel prices, in a sign that financial pressure is building on the industrial empire put together by British businessman Sanjeev Gupta.
According to CreditorWatch, which monitors credit scores and defaults, GFG Alliance’s Australian subsidiary One Steel has in the last month failed to pay at least two suppliers including Fire Rescue Safety and SGS, which provides site inspection services.South Australia’s Mining Minister, Tom Koutsantonis, confirmed on Monday that there were “creditors who are waiting for money”. But, Mr Koutsantonis added, some creditors were being paid and it was important not to “create a panic”.
An extended property meltdown in China has created economic uncertainties in the major export market, leading to lower demand for steel. At the same time, Beijing is pushing steel to be exported, leading to trade sanctions, including from India. ArcelorMittal, one of the world’s biggest steel producers, last month said it expected a big slowdown in growth over the next 12 months.
But Whyalla mayor Phill Stone said there was no choice but to back GFG Alliance. “We have to put our faith and trust that they are still working to a plan,” he said. “You couldn’t get it at a worse time if you planned it. Some of these job losses were in the wind.”
Steel Industry GFG Alliance Whyalla Steelworks Financial Pressure Debt Supply Chain Issues
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