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ABC News
17 hours ago
- Business
- ABC News
More job losses flow from Whyalla steelworks administration
After 19 years in a job that had been his pride and joy, Dylan Leebody is being forced to hang up his boots as another company in the troubled South Australian city of Whyalla enters administration. "It was a bit shocking at first to realise they're saying the days are numbered for this workshop … it was a bit disheartening," he said. "A lot of people are stressed out obviously about finding work." The workshop leading hand is one of 47 workers staying on at steel fabrication company Ferretti International, owned by GFG Alliance, until its final projects are finished. More than 100 jobs have already been lost, with 34 active staff terminated and the cessation of employment formalised for another 65. Mr Leebody said many employees were likely to find new roles but some could have to look beyond Whyalla. But for workers like himself with two young boys, relocation or FIFO work was not an option. Australian Manufacturing Workers' Union SA secretary Stuart Gordon said entitlements were also a major concern. "There's around $2.1 million owed in entitlements currently, we hope they can find the money and that's paid out," he said. He said there was still hope among workers OneSteel would buy the plant. Speaking after the first creditors meeting for Ferretti on Monday, administrator Michael Brereton from William Buck said the business was reliant on OneSteel as "its major customer". That was confirmed in a statement provided to the ABC by a GFG spokesperson, which noted that placing OneSteel into administration had resulted in "a significant downturn of Ferretti's revenue and operations". "[Ferretti's] employees have valuable skills and while the continued employment of the Ferretti workforce is a matter for the administrators, it is hoped that some employees will transfer to OneSteel," the spokesperson said. Ferretti was not the only business experiencing job losses that have been blamed on the town's struggling steelworks. Rail haulage group Aurizon has also explored the reduction of its workforce. According to a statement provided to the ABC by Aurizon, OneSteel had advised of an intention to "ramp down mining operations in FY2026", which would result in a reduction in train services from July 2025. "Aurizon is consulting with our workforce on the impact of this decision on our Whyalla-based workforce, which is expected to see a potential reduction of up to 24 positions," it said. Rail, Tram, and Bus Union (RTBU) SA secretary Darren Phillips said the organisation was planning to "explore options with Aurizon moving forward". Whyalla City Council mayor Phill Stone said the community remained resilient in the face of more job losses and many hoped the eventual sale of the steelworks could turn things around.
The Guardian
21-05-2025
- Business
- The Guardian
Liberty Steel has not produced anything at two key plants since July 2024
Liberty Steel has produced nothing at two of its key UK plants since July, in a sign of the deep financial difficulties for Britain's third-biggest steelmaker as it looks for rescue funding. The plants at Rotherham in South Yorkshire and Motherwell in Scotland have not produced any steel for about nine months because of lack of funds to buy vital materials, with workers on furlough on 85% of their salaries for the duration, according to workers who spoke to the Guardian. Steel companies have been struggling for several years. UK steel production fell in 2024 to its lowest since the 1930s, and the last month the government effectively took over the British Steel blast furnaces at Scunthorpe, amid fears over 2,700 job losses and the end of primary steel making in the UK. Liberty Steel is ultimately owned by Sanjeev Gupta, whose GFG Alliance metals empire is under severe financial pressure across the world after a debt-fuelled expansion spree. Gupta has been battling for control of metals companies in the UK and Australia against creditors led by the administrators for Greensill Capital, a lender that collapsed in 2021. Greensill had lent Gupta's companies about $5bn (£3.7bn). The financial turmoil has left Liberty Steel's UK plants unable to access cash needed to run their operations, with one creditor seeking to recover money via a winding up petition at London's high court on Wednesday. The Liberty subsidiary that runs the site at Rotherham, called Speciality Steel UK (SSUK), was granted until 16 July to hold talks with unnamed potential investors, in a desperate effort to avoid a liquidation that would put 1,450 jobs at risk. The Labour government would face pressure to step in if the Rotherham plant, seen as an important part of British steel-making capabilities, faced bankruptcy. SSUK supplies aerospace and defence companies including Rolls-Royce and Airbus, and operates an electric arc furnace at Rotherham, a related works nearby at Stocksbridge, and two other sites. That business owes creditors £619m, including £289m to related GFG companies and £289m to Greensill's administrators. Greensill's administrators, Grant Thornton, earlier this month opposed a restructuring plan that would have cut the amount owed to it significantly, leaving Liberty scrambling to find other emergency funding. Daniel Judd, a barrister representing the company, told the court that SSUK was 'urgently considering its options' after the failure of the restructuring plan, including talks to try to secure an unnamed 'third-party investor'. 'Urgent meetings have been taking place to advance this,' he told the court. The group confirmed it is considering a sale of its SSUKbusiness in South Yorkshire, saying that 'change is essential'. Jeffrey Kabel, Liberty's chief transformation officer, said: 'Today's adjournment is a positive development, allowing us the necessary time to finalise options including a sale of the business while we continue to pursue our debt restructuring efforts. 'We remain committed to finding the right solution that preserves electric arc furnace steel making in the UK, a vital national asset serving strategic supply chains.' Kabel said Greensill's collapse was 'restricting its access to capital', alongside 'longstanding competitiveness challenges dating back decades' for British steelmakers. Alun Davies, national secretary for steel at Community, a union representing workers, said the extra time 'essentially amounts to the company kicking the can down the road' and 'will achieve very little' other than uncertainty and distress for the workforce. 'Things cannot go on as they are,' he said. 'Sanjeev Gupta must demonstrate now that he is willing to invest in the business in a meaningful way, or he should step aside and make way for a new, responsible owner.' The UK's Serious Fraud Office has been investigating GFG Alliance and Greensill over 'suspected fraud, fraudulent trading and money laundering' since 2021. Government figures have long been wary of offering financial support to Gupta's companies in light of the investigation and concerns over whether money would be used to prop up businesses in other countries. Before July, Rotherham was running month-on, month-off for as long as five years, relying mainly on customers who could make pre-payments to buy materials needed. Rotherham runs the UK's largest electric arc furnace, melting scrap steel to make specialised automotive and aerospace parts. The Scottish site is run by another subsidiary, Liberty Steel Dalzell. Workers at the plant are concerned that the failure to restart production could result in the Royal Navy considering other options for steel for new warships. The fleet solid support ships are due to be made with steel from British Steel in Scunthorpe, which would be rolled into plate at Dalzell, and then fabricated at Harland & Wolff in Belfast. It is understood that the company is confident the Dalzell plant will be able to restart work soon.
Telegraph
21-05-2025
- Business
- Telegraph
Steel tycoon holds ‘urgent' talks to save UK factories from nationalisation
Steel tycoon Sanjeev Gupta is holding 'urgent' talks to try and stave off the nationalisation of his plants in Rotherham and Bolton. Speciality Steel UK, part of Mr Gupta's GFG Alliance, told the High Court on Wednesday that it was holding 'urgent meetings' with an unnamed investor interested in taking over the business. The company, which makes speciality products, is facing the threat of being liquidated after a group of disgruntled suppliers that are owed money took Speciality Steel to court. However, in a dramatic twist that was agreed at the last moment, the creditors agreed to a delay in the proceedings to allow Mr Gupta to attempt to negotiate a sale. If deal talks fail, the threat of compulsory liquidation would be revived and the Rotherham and Bolton factories, which employ 1,450 people, could be nationalised. It is thought that ministers have not ruled out taking over the plants, which MPs have described as strategic national assets, but this would not be contemplated before insolvency. The Government recently stepped in to save bigger producer British Steel amid a row with its Chinese owners over plans to shut down the last blast furnaces at its plant in Scunthorpe, Lincolnshire. Speaking for GFG in court on Wednesday, barrister Daniel Judd told Judge Sebastian Prentis that the steel plant's owner had been working on a turnaround plan that was withdrawn last week. Since then, the company has been scrambling to examine other options. Now a 'third party investor' has emerged, Mr Judd said, adding: 'Urgent meetings have been taking place to advance this.' He added that the potential deal was also expected to benefit Speciality Steel's creditors, of which there are hundreds in total. Mr Judd told Judge Prentis: 'The business is a hugely important steel undertaking in the North East.' As a result, the judge ruled that the proceedings would be adjourned until July 16 to allow time for a potential deal to be struck. A spokesman for GFG who attended court was unable to immediately provide further details about the mystery investor. Mr Gupta's plans for restructuring Speciality Steel collapsed after he failed to secure backing from the creditors of Greensill Capital, the troubled finance provider he had previously worked closely with. The tycoon is also thought to have approached the UK Government for support but was rebuffed. The Gupta Family Group Alliance (GFG) is a conglomerate spanning energy, steel and trading, employing more than 30,000 people. Mr Gupta, its executive chairman, made a name for himself as a saviour of steel jobs by buying up troubled plants and factories around the world and vowing to revive their fortunes. He owns steelworks in England, Scotland and Wales, all of which were previously threatened with closure. But his family's business has been in trouble ever since the collapse of Greensill in 2021, which left GFG scrambling for funding. Mr Gupta also faced another blow that year when it emerged that his empire was under investigation by the UK's Serious Fraud Office. GFG has said it is cooperating.
Yahoo
20-05-2025
- Business
- Yahoo
Fears for Aussie workers as tariffs hit hard
Hundreds of workers are in limbo after a major Tasmanian smelter paused operations, citing tariffs, ore supply and global price volatility. The move by Liberty Bell Bay, located in George Town, has prompted calls from both state and federal governments for transparency and urgent support for Australia's only commercial ferroalloy operation. It produces ferromanganese and silicomanganese and is one of Tasmania's largest industrial energy users. The smelter, which employs more than 250 people, is owned by British businessman Sanjeev Gupta's GFG Alliance, and is the latest of Mr Gupta's assets to face turmoil. Earlier this year, the South Australian government forced his Whyalla steelworks into administration, with administrator KordaMentha overseeing debts reportedly around $1 billion, the ABC reports. A spokesperson for Liberty Bell Bay, formerly known as TEMCO, said the facility lost its primary ore supplier after Tropical Cyclone Megan struck in March 2024. 'We are still working through ore supply options at present,' the spokesperson said. 'Price volatility globally and the imposition of tariffs in the US have also impacted operations. 'Due to ongoing challenges with ore supply, Liberty Bell Bay has no option but to enter a period of limited operations.' 'Big beautiful bill' to push the ASX deeply in the red The news comes as cautious investors pushed the ASX lower on Monday as investors wait to see the outcome of the Reserve Bank of Australia's board meeting and monitor the US debt markets. The benchmark ASX 200 slumped 48.60 points or 0.58 per cent to 8,295.10. The broader All Ordinaries Index also finished in the red down 55.10 points or 0.64 per cent to 8,524.80. Nine of the 11 sectors finished in the red, led by energy and material stocks which were down 1.82 and 1.55 per cent respectively. Among the key falls were the major iron ore miners including BHP which slid 2.44 per cent to $38.75, Rio Tinto which fell 1.31 per cent to $119.46 and Fortescue Metals which slumped 4.88 per cent to $16.17. It was a mixed day for Australia's big four banks. CBA jumped 1.00 per cent to $171.36 while Westpac dropped 0.76 per cent to $31.37, NAB fell 0.46 per cent to $36.84 and ANZ sank 1.73 per cent to $28.40. IG market analyst Tony Sycamore said investors were cautious ahead of the 'very unlikely scenario' the Reserve Bank of Australia does not cut on Tuesday. 'If we don't get a rate cut tomorrow the ASX 200 will be down 100 points and it will be a tricky day,' he said. 'It's fully priced in so there will be carnage in the rates market, carnage in the equities market, the Aussie dollar will probably be supported.' Mr Sycamore said the other major issue to watch is the US bond rate, which is on the back of US President Donald Trump's latest bill. Dubbed the 'big, beautiful bill' by Mr Trump, there are substantive tax cuts of $2.5 trillion over 10 years, which could mean $4 trillion less is added to the government's coffers by 2034. Mr Sycamore warns, what happens tomorrow will largely depend on how the bond market reacts to the White House bill. 'It is going to be all about US yields. We could come into an absolute shocker tomorrow but I think it's all going to depend on where the US yields and whether they can digest it or not,' he said. 'It feels like yields want to pop to me, but it is at a huge level and whether it pops now or in a month's time it's hard to tell.' Moody's downgraded the US from its all important triple A credit rating, while US Treasury yields were up, with 10 year treasuries adding 7 basis points to 4.51 per cent while 30 year treasuries notched 8 basis points to 4.98 per cent. Defensive stocks including gold miners were among the major winners with Capricorn Metals was the best performer on the ASX 200, rising 3.4 per cent to $8.71, while Evolution Mining rose 3.2 per cent to $8.12. In company news, New Hope shares tumbled 7.1 per cent to $3.65 after downgrading its guidance for future coal output and sales. Domino's shares also slumped 2.6 per cent to $24.55, after announcing the chief of its Australian and New Zealand business Kerri Hayman would step down in August, following just nine months in the job. Error while retrieving data Sign in to access your portfolio Error while retrieving data
ABC News
19-05-2025
- Business
- ABC News
George Town locals are worried about their region's future as smelter limits operations
Liberty Bell Bay, near the northern Tasmanian community of George Town, is Australia's only manganese alloy smelter, and a major employer in the region. On Monday, the company, which has more than 250 full-time workers, announced it would "enter a period of limited operations". Tasmanian Premier Jeremy Rockliff has called it a period of "care and maintenance". It remains unclear how long it will last. Global ore supply issues, volatile prices, and extensive US tariffs have all been cited as reasons for the decision. And while the company has said there would not be any forced redundancies, locals say any jobs lost will be a hit to the region. Michael Wuksta has lived in George Town for almost three decades. He said Monday's announcement was not the first time the region had braced for the smelter's closure. "But it might be the last time," Mr Wuksta said. In 2019, the smelter's future was in doubt after its former owner, South32, announced it was reviewing its operations, before it was purchased by international company GFG Alliance the following year. Mr Wuksta said if it were to close, it would not be good for the wider community. In February, another GFG-owned entity, the Whyalla steelworks, was forced into administration by the South Australian government due to its failure to pay back its growing debt. The federal government then announced a $2.4 billion joint state-federal support package to protect jobs and ensure the continuation of the steelworks. George Town resident Irene Maynard said the announcement that work would now pause at Liberty Bell Bay had left her surprised. Ms Maynard said employees at the smelter — including her grandson — were upset. "If there's going to be jobs missing, it's going to be pretty bad. "I think the government should step in, but whether they do or not — that's a different thing." Another local, Colin Himmelberger, said the prospect of job losses was scary for the area's future. "And if a couple of hundred people lose their job, it's not going to be very good for the town at all. "It's hard enough to find a job these days without something like this happening. "Where are they going to go?" Mr Rockliff said he understood about 40 Liberty staff would be needed during the care and maintenance phase. "Naturally we're very concerned for the local community, all the employees," he said. In February this year, state-owned energy producer Hydro Tasmania confirmed it had locked in a 10-year power deal to supply electricity to the ferroalloy smelter, which accounts for about 7 per cent of the state's energy usage. Hydro Tasmania's acting chief executive Erin van Maanen at the time said the smelter was "a significant employer in the state" and described the agreement as mutually beneficial. Only a few weeks later, the South Australian government forced Whyalla steelworks into administration. At the time, Tasmanian Greens senator Nick McKim said the federal government should "be prepared to step in and "offer similar assistance" to the state-federal package delivered to Whyalla, should Liberty face the same fate. On Monday, Industry and Innovation Minister Tim Ayres urged Liberty to "provide sufficient support" to keep processing ore, and said he would establish a team within his department to assess the facility's commercial position. Mr Ayres said he would provide the federal and Tasmanian governments with advice over the coming days.
