GFG Alliance has entered Whyalla Ports Pty Ltd into voluntary administration amidst a legal dispute over the ownership of the Whyalla port, following intervention by the South Australian government.

This subsidiary was previously responsible for operating the port but has faced a Federal Court challenge initiated by administrators of the Whyalla steelworks, KordaMentha, who seek to take control of the port to sell the steelworks as an integrated asset.

Recent legislative changes implemented by the state government have clarified that the port is owned by OneSteel Manufacturing, a GFG subsidiary that managed the steelworks prior to its own administration in February.

In a statement released on Saturday, a spokesperson for GFG Alliance indicated that the legal changes left the company with "no option but to place Whyalla Ports Pty Ltd into voluntary administration."

The spokesperson noted that the company was confident the Federal Court case would have favored them had it been adjudicated in the traditional manner.

They cited that Whyalla Ports' revenues have been significantly affected by the actions of the South Australian government.

Following the termination of its lease and the seizure of its assets at the request of the administrators, Whyalla Ports Pty Ltd is unable to engage in commercial activities, leading to a halt in all revenue streams.

Simultaneously, KordaMentha has continued operations at the port despite the ongoing legal dispute.

A spokesperson for the state government asserted that GFG's decision to place the port company into administration does not disrupt the facility's operations.

"The port continues to operate as usual," the spokesperson affirmed.

The administration of any GFG operation, they added, is strictly a matter for GFG.

GFG contends that KordaMentha has utilized Whyalla Ports’ infrastructure without compensating the port for the use of land and assets valued in the millions.

In contrast, the South Australian government argues that ministerial consent was necessary to lease the port, and this consent was not requested or granted.

A government spokesperson expressed confidence in the legal measures taken by KordaMentha, stating that the recent legislative adjustments aim to prevent similar situations in the future.

At a Federal Court hearing on Tuesday, KordaMentha sought to withdraw its legal claim against Whyalla Ports, asserting that the government’s law amendments had resolved their objectives.

However, the court also heard that Whyalla Ports intends to maintain a cross-claim as disputes over the ownership of certain assets persist, with a trial anticipated in August.

GFG declared that the move to appoint administrators for Whyalla Ports would not impact the operations of the broader GFG Alliance.