Federal government announces Arrium assistance

The federal government announced a $49.2 million loan for Arrium’s iron ore mines, which it said would have an “immediate impact” on the iron ore and steel business.

AAP reports that the loan would be made for equipment, allowing higher grade iron ore to be produced at two mine sites owned by the company, which went into administration in April.

“It will have an immediate impact on the business, securing jobs, at Whyalla and Arrium, and it is exactly what the administrators have said is necessary to make the business viable into the future,” industry minister Chris Pyne told AAP.

The SA treasurer Tom Koutsantonis said it was worth investing in the mines, but iron ore was only relevant if the Whyalla steelworks were still operating.

The announcement follows a pledge by the opposition to provide $100 million in assistance: $50 million in grants and the same amount in loan guarantees. The SA Labor government has also announced it would provide $50 million in assistance.

Administrator Mark Mentha of KordaMentha welcomed the federal government’s announcement.

“While the proposals are different in terms of loans, grants and matching investment reserves they all send a positive message to potential bidders and future owners,” he told The Australian Financial Review.

Meanwhile, independent SA senator Nick Xenophon called on KordaMentha to make the long-term plan it shared with the government and opposition public.

“We need to know what the package is that’s been requested,” Xenophon told the ABC.

“If we lose our structural steel manufacturing capacity, it will literally affect hundreds, if not thousands, of steel fabrication firms around the country, cause chaos with logistics and supply chains and cost many thousands of jobs.