Prime Minister Malcolm Turnbull says the planned 600km upgrade of rail lines between Adelaide and Tarcoola will commence within months, a move that could save jobs at Arrium’s Whyalla steelworks.

“This is a very significant and very welcome additional opportunity for the plant,” Turnbull told reporters in Whyalla on Wednesday.

Arrium has historically been the sole supplier of rail lines for the government-owned Australian Rail Track Corporation, which is spearheading the upgrade.

The company announced last month it needed to find $60 million in cash savings to avoid mothballing the Whyalla steelworks.

But Turnbull said Arrium had not requested a federal bailout.

“They have not sought any assistance package from the federal government at all,” he said.

“What this company needs is stronger steel prices and more customers, more demand. That is what we are providing here.”

Bringing forward the upgrade was as a “clear-eyed, practical” solution which would improve the productivity of the ARTC’s infrastructure, the prime minister said.

Arrium cut about 900 jobs at Whyalla last year as it grappled with a plunge in iron ore and steel prices and cheap imports.

The closure of Arrium’s Whyalla plant would result in the loss of about 1000 jobs and also risk a flow-on to thousands more across the region.

ARTC chief executive John Fullerton declined to reveal the value of the steel supply order but said work could begin within three months.

AAP