Arrium

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:06): I seek leave to make a further ministerial statement.

Leave granted.

The Hon. A. KOUTSANTONIS: I am delighted to inform the house that the Prime Minister has today announced that the commonwealth government will bring forward an investment of $250 million to upgrade 600 kilometres of rail infrastructure between Adelaide and Tarcoola. Over the past month, the South Australian Steel Taskforce developed a series of options for the commonwealth to consider. We have been working closely with the Minister for Industry, Innovation and Science, the Hon. Christopher Pyne, on this very proposal and we welcome today's news and acceptance of this proposal.

Historically, Arrium has supplied high-quality rail to the Australian Rail Track Corporation, which manages and maintains more than 8,500 kilometres of rail infrastructure in this country. By bringing forward this investment, Arrium will be in a position to bid to supply rail from its Whyalla Steelworks, improving the profitability of the company's steel division.

Although we are awaiting further details from the Prime Minister's office, ARTC estimates this upgrade to be about $80 million of rail which can be smelted and provided by Arrium. If the company were to win the order, this scale will help Arrium ride out the current low-price environment for steel. The Adelaide to Tarcoola track is about 50 to 60 years old, and the ARTC has indicated that work on this project can begin within three to six months of official approval, with the first orders placed for steel rail placed during that period.

This project will take two to three years to complete, creating about 130 jobs at the ARTC, mostly in Port Augusta and the Upper Spencer Gulf region, as well as hundreds of indirect jobs. It has also the potential to create supply opportunities here in South Australia during the laying of rail, sleepers and ballast.

This is not the only solution to the situation facing Arrium, but it will be a major part of the government's response, and I thank the Prime Minister and minister Pyne for agreeing to the proposal as a way of supporting Arrium and its workforce. South Australia is the birthplace of Australia's steel industry. As a nation, there is a strategic imperative to continue to be a country that manufactures steel. The South Australian government, through its Steel Taskforce, continues to work with Arrium and the commonwealth to identify other options for supporting the long-term future for the Whyalla Steelworks.