South Australian government steps in amid Whyalla port dispute

The South Australian government aims to introduce new legislative amendments to resolve a dispute over the ownership of the Whyalla port, a critical asset for the city’s steelworks operations.

Premier Peter Malinauskas announced amendments to the Whyalla Steelworks Act 1958, clarifying that the port is owned by OneSteel Manufacturing, the former operator of the steelworks, and not Whyalla Ports Pty Ltd, a subsidiary of GFG Alliance.

Malinauskas says maintaining access to the port of Whyalla was “essential for the Whyalla steelworks’ operations”.

The dispute centres on a 2018 lease agreement in which OneSteel purportedly leased the port to Whyalla Ports without obtaining the necessary consent from the state government, as required under the indenture agreements. Administrators KordaMentha argue that this lease is invalid and affects efforts to sell the steelworks to potential buyers.

Back in February, OneSteel was placed into administration by the South Australian government, citing financial instability and the need to safeguard the facility’s future. The administrators have since been working to stabilise operations and prepare the business for sale.

The Premier’s intervention seeks to give this dispute legislative clarity.

“The Administrators have advised the State of a purported lease agreement granted by OneSteel to Whyalla Ports Pty Ltd, a separate company owned by GFG. The lease was entered into without the prior consent of the State of South Australia,” Malinauskas says.

“The State has seen fit to clarify the status of the land which is subject to the purported lease, of which OneSteel is the registered proprietor for the purpose of operating the Port of Whyalla.

“The Indentures require consent of the State for the transfer of rights, obligations, powers, benefits and privileges conferred on OneSteel by the Indentures to another person or company.

“The bill has been drafted out of an abundance of caution to clarify the effect of the failure to obtain prior consent, and make it clear that the purported lease agreement granted by OneSteel to Whyalla Ports never had legal effect from the beginning.”

The outcome of the legislative changes and the ongoing court case will be pivotal in determining the future ownership and operation of the Whyalla port and, by extension, the steelworks.