Australia’s largest rail freight operator has suspended some services for the Whyalla steelworks’ owner GFG Alliance in the Upper Spencer Gulf because of unpaid debts.
Aurizon transports iron ore from GFG Alliance’s mining operations at the Middleback Ranges to the Whyalla steelworks and port, and from there ore is exported to customers, mainly in Asia.
In a statement, a spokesperson for the freight operator said it has halted some of its rail services for GFG Alliance because of “unresolved contractual issues”.
“We have endeavoured to find a suitable way forward, however, Aurizon has now suspended some rail haulage services to the customer until these issues are resolved,” the spokesperson said.
“This will impact Aurizon’s operations and the work our employees do for the customer.”
Aurizon said it would continue to work through the potential impacts with its staff.
The mining operations are profitable at a time the steelworks is losing money because its coal-fire blast furnace has been offline for almost six months this year.
In an interview with ABC News earlier this week, GFG Alliance chairman Sanjeev Gupta said he was committed to fixing the furnace and running it at full capacity in a bid to return the steelworks to profitability.
He also acknowledged problems with debts owed to contractors.
“There has been issues with some of our larger contractors, but that is normal in the business which is losing money, and it has to find solutions with its vendors, and we have good collaborative relationships with our large vendors,” he said.
“There are no issues with them, there’s nothing which is threatening in itself.”
In response to Aurizon’s statement, a spokesperson for GFG Alliance said, “we continue to work constructively with our suppliers to manage through the current market downturn impacting the steel industry.”
The South Australian government said it is aware of the situation “and it remains our expectation that creditors get paid.”
Last month, the state government raised concerns that GFG could go into administration after revealing the company had fallen behind on its royalty payments.
ABC
