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State Govt pledges $50 million for Arrium


UPDATED: Prime Minister Malcolm Turnbull has dismissed a proposed bailout of Arrium’s Whyalla steelworks, describing it as premature.

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Premier Jay Weatherill has written to Turnbull and Opposition Leader Bill Shorten seeking a $100 million commitment to the troubled operations to go alongside a $50 million State Government contribution.

Shorten on Thursday said he would meet with Mr Weatherill to “look at the options” and urged the prime minister to join the discussion.

But Turnbull ruled out further funding until a government-commissioned review by expert adviser Russell Caplan was completed.

“It would be premature for the Australian government to make any further financial commitments until Mr Caplan’s assessment of Arrium Whyalla and the administrator’s request for financial assistance have been finalised,” Turnbull wrote in a letter to  Weatherill.

The prime minister said he looked forward to working with Weatherill to support the Whyalla steelworks’ long-term viability.

Arrium’s new buyer may be eligible to apply for a loan of up to $100 million through the Export Finance Insurance Corporation and Clean Energy Finance Corporation, he added.

Shorten said the future of steelmaking was “more important than the day to day politics” of the election campaign.

“I’ll meet with Mr Weatherill to look at the options and urge Mr Turnbull to join us,” he said.

“I don’t want this to be a political football. We should be working together to find a decent solution.”

Arrium was placed in administration in April after failed negotiations with its lenders amid sustained low commodity prices.

Administrators KordaMentha expect the company to attract genuine interest from potential suitors, with the restructuring and sale of the group to be finalised by the end of the year.

Lead administrator Mark Mentha on Thursday said a potential assistance package would provide a shot in the arm for Whyalla.

“It’s a great response to what has been an unbelievably strong display of unity by all stakeholders in the Arrium businesses,” he said.

“This will make Arrium a much more attractive and sustainable proposition for potential investors.”

A South Australian steel taskforce has been working with Arrium and KordaMentha on an assistance package to ensure the long-term viability of the Whyalla plant which employs about 1600 people.

It’s proposed any government funding could only be accessed by a new owner of the company to support the Whyalla operations.


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