Arrium is in negotiations with politicians and financiers about what can be done to ensure steelmaking continues at the Whyalla factory, the closure of which would affect more than 1,500 jobs.
As reported yesterday, Arrium has announced that it needs to make $60 million in savings at the steelworks, on top of another $100 million announced in October, to save the site from being put in care and maintenance. Studies by the company are underway examining the effect of mothballing the facility.
The South Australian Labor government has said that “buy Australian first” policy for steel by other state governments would ensure the steelworks was sustainable.
"I think it's a tough time but my money is on it that we are going to get through it one way or another,” Liberal MP Rowan Ramsey told the ABC.
"I've been on the phone this morning to the Minister for Industry Christopher Pyne … I raised the issue last week again with the Prime Minister and with Christopher and I know they are engaged at the highest level.”
Pyne's office released a statement this morning, which did not mention Arrium but announced a report into the effect of dumping steel from the Asian market – currently in a glut – in Australia. This would inform a second set of anti-dumping reforms.
“In recent times I have expressed my ongoing concern about the negative impact Asian steel and aluminium markets are having on Australian manufacturers,” Pyne said in the release.
The Australian Financial Review meanwhile reports that Arrium is meeting its financiers this week.
It has a net debt of over $2 billion, is losing over $500 million a year, has a market capitalisation of $185 million, and the recent difficulties would’ve come much sooner if it wasn’t for a “contentious 2014 equity raising”, reports Business Spectator.
The company also operates two other, smaller plants, at Sydney and Melbourne, which are profitable. Arrium has said any lost output from a Whyalla closure could be made up for by increasing output at these, reports The AFR.