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Arrium steelworks 'to break even' in 2016-17

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Arrium’s Whyalla steelworks is set to break even in the coming financial year, while the group’s mining business will make a slight profit, KordaMentha administrators say.

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Mark Mentha has found $300 million in savings across Arrium for the 2016-17 financial year, mainly in reduced supply contracts and savings introduced by previous management.

“Arrium is a far more efficient company today than it was yesterday,” he told ABC radio today.

“With the plant and capex initiatives that we’re looking at, this money will move the dial in making this business far more viable long term and therefore makes it a realistic long-term proposition for a buyer.”

This comes after state and federal Labor pledged a combined $150 milllion to support a new owner of the steelworks.

Opposition Leader Bill Shorten, who is visiting Whyalla today, said Labor would refuse to let the steelmaker fail.

“If these jobs went, 3500 families would suffer enormously – that’s completely unacceptable to me,” he said.

The Turnbull Government, however, is resisting calls for a bailout of Arrium.

“We’re not going to get into a political auction before the election,” Treasurer Scott Morrison told ABC radio today.

Earlier this month, the Prime Minister said it would be premature for the Federal Government to make further contributions until a government-commissioned review by expert adviser Russell Caplan was completed.

South Australian Premier Jay Weatherill is holding out hope of a bipartisan approach, saying the issue is too important for the state and the nation to be left to politics. He has asked both Turnbull and Shorten for a $100 million commitment to the troubled operations to go alongside a $50 million State Government contribution.

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

-AAP

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