South Australia sets aside $650m for Whyalla
The South Australia Government has announced its contribution of $650m to support Whyalla steelworks as part of the $2.4b sovereign steel package in partnership with the Federal Government.
This comes as part of the state’s FY26 budget and follows the state placing OneSteel Manufacturing, Whyalla steelworks’ owner, into administration in early 2025.
The budget provides $192m of stabilisation funding, a further $395m for modernising of the steelworks and $63m in an emergency response package.
Industry response to the budget has been mixed, with criticism coming from South Australian Chamber of Mines & Energy (SACOME) and The Association of Mining and Exploration Companies (AMEC).
“In total, this [package] amounts to $650m over three years or 2% of the South Australian resource sector’s economic contribution to the state,” SACOME said in a statement.
“A further $192m has been provisioned for an additional six months of stabilisation if the sale process takes longer than expected, contingent upon [Federal] agreement to a 50:50 contribution.
“On these calculations the Whyalla steelworks will cost the South Australian taxpayer $64m per month in stabilisation costs alone. Should the sale take 17 months the cost to South Australia will be over $1b.”
Ahead of the budget, SACOME highlighted the increasingly urgent need for the release and funding of a suite of strategic policy initiatives, including:
- Energy Transition White Paper;
- Critical & Strategic Minerals Strategy;
- Copper SA Strategy;
- Resource Sector Heatmap & Infrastructure Corridors Framework;
- Green Iron & Steel Sector Supply Chain Study;
- Carbon capture & storage industry development;
- Cyber Infrastructure Taskforce and
- State Workforce Plan.
These initiatives aim to remove impediments to investment in, and development of, resources projects in South Australia, according to SACOME.
None of these initiatives received funding in the state budget.
SACOME chief executive Rebecca Knol says the budget highlights the significant ongoing expenditure resulting from Whyalla steelworks being placed into administration.
“SACOME’s key takeaway from the FY25-26 state budget is that no funding has been made available to progress strategic policy initiatives that the SACOME has identified as critical to growing the South Australian resources sector,” she said.
“This signals a very challenging year ahead for the resources sector and the Department for Energy & Mining.”
AMEC chief executive Warren Pearce says there are no real surprises in the budget and nothing for industry to get overly excited about.
“While the $650m 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,” he said.
“Of significant note, is the inability for [the South Australia Government] to release their highly anticipated Critical Minerals Strategy, something that has been in the pipeline for over three years now.
“With a Federal Government committed to an energy transition that runs through critical minerals, SA strangely remains the only jurisdiction in the country not to release their own strategy.”