THE SOUTH AUSTRALIAN Government’s Wednesday decision to seize control of the GFG Alliance’s Whyalla steelworks and appoint administrators Korda Mentha, and the state and federal government’s subsequent commitment to a $2.4 billion rescue package has come not a moment too soon for suppliers.
While no individual debts – other than to government entities – have been disclosed, financial media puts the total at over $300 million. Service providers declined to comment ahead of the first meeting of creditors, scheduled for 3 March, saying only it was “good news for Whyalla”.
CSL Australia provides transhipment services for ore exports from Whyalla Port, which is owned and operated by GFG Alliance and principally serves subsidiary SIMEC Mining, which supplies ores to the steelworks and for export. The port also handles other bulk, breakbulk and project cargoes.
Engage Marine provides port towage services as well as handling CSL’s self-unloading barges and floating offshore transfer barge.
According to the SIMEC website the Middleback Ranges operations incorporate the Iron Baron, Iron Knob and South Middleback Ranges mine sites. They mine both hematite and magnetite iron ore which is respectively railed and piped to Whyalla. The majority of the magnetite is pelletised (c.1.3mtpa) and used within the steel works.
The hematite ore (c.10mtpa) and excess magnetite is loaded onto ships for transport to a primarily Asian customer base. Total reserves and resources are just under half a billion tonnes.
According to AIS yesterday morning tugs Engage Crusader and Engage Vanquish were working with barge Middleback while Engage Vanguard and Engage Challenger were working with barge Barngala conveying ore to tranship barge Spencer Gulf, which was loading bulker Golden Zhoushan. Three other bulkers, Berge Dhaulaigiri, Lycavitos and Oregon were waiting at anchor. Baulkers Baltic K and Lowlands Freedom were alongside, as was the second CSL transhipper, Whyalla.
Railcos Aurizon and Pacific National are both reported to have suspended services to GFG companies at times over recent months but the former confirmed at the release of its half-year results on Monday [17 February] that it had resumed services to the Whyalla steelworks.
The Australian reported that Aurizon MD Andrew Harding declined to comment on how much the company was owed and whether a payment agreement had been reached with GFG. But the company’s accounts reveal a $11 million provision for doubtful debts has been raised in the company’s bulk division, relating to what chief financial officer George Lippiatt described as late payments from a “small number” of customers.
