A first meeting of Arrium’s creditors is being held today, with the iron and steel business’s administrator saying the future hinges on the Whyalla’s steelworks.
Mark Mentha of insolvency firm KordaMentha said most of the company, which owes around $4 billion, is in good shape, but was exposed to the survival of Whyalla. Arrium, which entered voluntary administration this month, has said it was undertaking studies on the effects of mothballing the loss-making plant.
Turning the steel factory around was vital to both Arrium and the community, Mentha told the ABC.
“In Whyalla, in particular, many of the businesses in that town are in some way connected to the steel works. So it’s a business that is very much interwoven into the fabric of that community and the state of South Australia.
The creditors meeting is being held in Sydney and streamed to workers in SA.
Meanwhile, the Australian Workers Union has called on the federal government to consider co-investment in the steel facility, with modernising to supply the upcoming offshore patrol vessels a “golden opportunity” for Arrium.
“In the case that Australian steelmaking operations, like the Whyalla steelworks, would require an upgrade to manufacture the grade of steel required, the Government should look to enter into a co-investment arrangement,” AWU national secretary Scott McDine told The Advertiser.