Prime Minister Anthony Albanese and South Australian Premier Peter Malinauskas will on Thursday visit Whyalla to announce a joint support package, one day after its struggling owner GFG Alliance was overtaken by the order.
The unusual outcome came after the SA government rushed legislation through parliament on Wednesday, giving it authority to act on debts owed by GFG in a bid to secure the steelwork's future operations.
But GFG's owner, UK billionaire Sanjeev Gupta, said the state was on the "wrong course" in forcing the operation into administration and that he was seeking legal advice, according to an internal company memo obtained by The Australian Financial Review.
"This news will be disappointing to us all, not least to me personally, given the huge efforts we have all put in to save Whyalla in 2017 when it was losing $1 million a day, return operations in 2024 after a near-death experience, and promote Whyalla's magnetite potential to a global audience," Mr Gupta said, according to the report.
Mr Malinauskas said the federal government was kept up to date with the situation surrounding the steelworks as the crisis ramped up in recent weeks.
"It's not a thing we do lightly," he told Nine on Thursday, referring to the administration action.
"We can't lose it (Whyalla).
"It's important for the nation ... So much of the steel that we use, and everything in Australia, is made at the plant ... and these people need security and stability.
"The former owner just wasn't providing that."
GFG has been under intense pressure from the government to pay debts to creditors of the steelworks and the state, which is owed "tens of millions of dollars", including $15 million to SA Water.
Mr Malinauskas said administrator KordaMentha would explore a possible sale of the business.
"I've been really determined to make sure that we're not bailing out GFG," he said.
"What we want to do is invest in the future of the new steelworks."
In Whyalla on Thursday, he and the prime minister will announce "one of the most comprehensive industry support packages that this nation has ever seen", and could be as much as $2 billion.
It is not yet known how big a role the federal government will play in the support package, but Mr Albanese and Industry Minister Ed Husic will be in Whyalla.
"As a nation, we've got to have the ability to put the two together and produce steel for ourselves, otherwise, we're going to be completely dependent upon other countries supplying us steel," Mr Malinauskas said.
"In the current geopolitical circumstances, we need sovereign steel making this country."
Mr Malinauskas said "taxpayers have to step up to the plate if we want to make steel as a country".
The federal opposition said it supported the SA government's decision to place the steelworks into administration and is awaiting details of the support package.
The move comes after months of uncertainty at the steelworks and reassurances from its chairman.
Mr Gupta on Friday said a debt settlement deal had been reached with creditors of global financier Greensill Capital, which had advanced billions of dollars in credit to GFG before collapsing in 2021.
He later said the steelworks was turning over $13 million to $14 million a week and hoped it would break even by midyear.
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