Manufacturing News

Benefit of subs contract to Whyalla unclear

Yesterday’s announcement that 12 new submarines designed by France’s DCNS will be built at Osborne has been welcomed by various South Australian politicians, but the potential benefit to struggling steelmaker Arrium is not known.

Yesterday prime minister Malcolm Turnbull made the long-awaited announcement at the Adelaide shipyard.

The Adelaide Advertiser and others noted the repeated use of the phrase “Australian steel”, a sensitive topic in the state, where steel and iron ore business Arrium is in administration.

“The characteristics of the steel that will be required (for the Future Submarines) will obviously await the completion of the design process, but our commitment is that that steel will be made …(it) will be Australian steel,” Turnbull said.

Arrium’s administrator, the Australian Workers Union and others have been urging that Arrium supply steel for the submarines, but it is currently unable to fabricate the special flat steel necessary. Significant investment would be needed in the Whyalla plant, and the cost of this is not known.

A spokesperson for administrators KordaMentha told Whyalla News that, “It would take an enormous capital investment, and quite a lot of time, to equip the steelworks to make flat steel.”

The AMWU has also urged co-investment in modernising the Whyalla plant, calling the submarines decision a “golden opportunity” for the federal government to assist Arrium, which currently owes $4 billion.

“If it needs upgrades in the Whyalla plant, then that should happen,” SA secretary John Camillo told the ABC.

Acting mayor of Whyalla, Tom Antonio, pointed out yesterday that whatever happens, it would be years before the submarine contract would be put into action.

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