Up to 116 jobs are expected to go in mines near Whyalla in South Australia, adding to the recent wave of redundancies linked to steelworks operator GFG Alliance. The job losses are part of a transition to magnetite ore mining as the company ramps down hematite mine operations following depletion of reserves. The mines in the Middle Back Ranges on Eyre Peninsula help feed Whyalla's steelworks — but as changes begin to be implemented to the type of iron ore being extracted, fewer workers are required.
The owner of the Whyalla Steelworks is blaming what he calls a ‘global crisis’ for the loss-making facility’s woes – but say he remains committed to its future. Sanjeev Gupta, the owner of the Whyalla Steelworks, has told the Adelaide Advertiser the operation has lost more than $1.3 billion since he bought it out of administration in 2017. He believes the future for the steelworks is bright, stating “Where others see problems, I see the multi-generational opportunities that Whyalla offers for the future of green iron and steel, a mega-trend that will boost demand and shape our industry for centuries to come.”
However, the company has been shedding workers, and local suppliers have complained of late payments. The company has also confirmed the facility’s crucial blast furnace is offline for repairs once again, adding to the concerns surrounding the plant’s future. These issues have led to concerns about safety at the Whyalla Steelworks plant, with several sources expressing worries about a lack of preventative maintenance.
Cost-Cutting Measures and Safety Concerns
GFG Alliance has admitted to cutting costs, including on maintenance work at the plant, as it contends with a global slump in steel prices. “To manage through the market downturn, we are reducing fixed costs including maintenance to calibrate with lower market demand. We are reducing all non-essential spending and prioritizing areas that are safety critical and essential for production,” a spokesperson for the company said. This cost-cutting measure, however, has raised concerns about safety, with several sources raising the alarm to ABC News about safety concerns at the steelworks.
One former steelworks employee, speaking anonymously, expressed fear that someone would “get hurt” due to insufficient preventative maintenance work. They said, “Unfortunately, Mr Gupta, he’s got a lot of words, but I haven’t seen one bit of action, he has not spent 1 cent in doing anything to improve that plant.” This sentiment was echoed by a local contractor who said his company had gone from averaging $360,000 of work a month with the steelworks to “virtually nothing” since May, stating that “the proper maintenance that needs to be done couldn’t be performed with the people they’ve got.”
Union and Government Concerns
The Australian Workers’ Union is “very concerned about the cost-cutting measures to the infrastructure of the plant,” according to acting state secretary Gary Henderson. “Unfortunately, when there is a shutdown of the blast furnace, which went for several months, and there is significant financial pressure, they’re just trying to cut as many costs as possible,” he said. Henderson also highlighted concerns regarding safety and well-being of workers, stating “When workers go to work and they see things that should be fixed that aren’t fixed, basically putting a bandaid over it and then moving on to the next job, it’s work that they shouldn’t be doing. It’s creating an unsafe workplace, and to be quite honest GFG Alliance need to do better in that space.”
Meanwhile, local MP Eddie Hughes has expressed his concerns about safety and “the state of the plant,” stating “It’s no secret, anybody that works there knows that the level of maintenance has not been commensurate with the nature of the plant and the age of the plant. There has been very limited preventative maintenance over an extended period of time, indeed some of this goes back as far as Arrium days and even further. With an aging plant, that is a real concern.”
While GFG Alliance insists that safety remains their number one priority, the situation is certainly causing anxiety and uncertainty for workers and the Whyalla community. The company’s commitment to its green iron and steel investment plans remains unclear as the steelworks continues to grapple with financial challenges and safety concerns.
A Future for Whyalla?
The future of Whyalla and its steelworks remains uncertain. While Gupta continues to reiterate his commitment to the plant’s future and his vision for green iron and steel, the recent job cuts and safety concerns raise significant questions about the long-term viability of the facility. The impact of these developments on the Whyalla community, heavily reliant on the steelworks, is immense. It remains to be seen whether GFG Alliance can overcome the current challenges and deliver on its promises for a sustainable and prosperous future for Whyalla.
