Albanese plunges $2.4bn into Whyalla Steelworks after forced administration

Prime Minister Anthony Albanese has flown to South Australia where he is announcing funding for Whyalla Steelworks after it was forced into administration.

The Prime Minister has been joined by South Australian Premier Peter Malinauskas and Industry Minister Ed Husic.

Mr Albanese said that federal and state governments would invest $2.4 billion to rescue the steelworks.

"My government is building Australia's future. And to do that, we need Whyalla steel," he said on Thursday.

"Whyalla steel has forged some of our country's biggest projects - rail lines, airports and stadiums.

"That's why today in partnership with the Malinauskas government, we are delivering more than $2 billion ensure the future of the steelworks and support local jobs.

"My government is building Australia's future and backing Australian workers."

The Whyalla Steelworks was forced into administration by the South Australian government on Wednesday to avoid it becoming "irredeemable".

Legislation was rushed through state parliament to allow the SA government to act on the hefty debts owed by Whyalla Steelworks' owner GFG Alliance.

GFG owes the SA government "tens of millions" in unpaid royalties while SA Water has been owed about $15 million.

KordaMentha, an Asia-Pacific advisory firm, has been appointed as the administrator of the steel mill.

"I have spent time with (the creditors) over recent weeks," Mr Malinauskas said.

"They are people who have done the work and not been paid and they have done it because they committed to the feature of their town and community.

"Now they can go to work tomorrow knowing if they do the work they will get paid for it."

It remains uncertain how long it will take for the government to find a new buyer, as it originally took 17 months for the last buyer to purchase Whyalla.

The forced administration comes amid months of uncertainty about the future of the company.

British billionaire Sanjeev purchased the plant for $700 million in 2017 with ambitions to transform it into a green steel plant by using hydrogen.

The steelworks has been plagued with issues, including a series of shutdowns of its coal-fired blast furnace, underinvestment and frequent delays for upgrades.

A spokesperson for Industry Minister Ed Husic said the ongoing troubles at the steel mill needed to stop.

"What's going on in and around Whyalla can't continue," the spokesperson said.

"Workers kept in the dark, creditors - including the SA government - unpaid, a proud industrial city left wondering about its future."

A GFG spokesperson said the company was assessing the South Australian government's announcement and "seeking advice on its options".

"Our concern is first and foremost the wellbeing and safety of our employees," the spokesperson said.