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House of Assembly - Fifty-Third Parliament, Second Session (53-2)
2017-05-30 Daily Xml
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Ministerial Statement

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 ministerial statement.

Leave granted.

The Hon. A. KOUTSANTONIS: I would like to further update the house on the sale process for the Arrium Group and our ongoing efforts to secure the thousands of jobs that rely on the Whyalla steelworks and the iron ore mines of Upper Spencer Gulf.

In March, the administrators, KordaMentha, working with investment bank Morgan Stanley, short-listed two bidders for Arrium Australia. Those bidders are seeking to buy the company in one line, which is to say the Whyalla and east coast businesses and associated entities in their entirety. The outcome of this stage of the sale process is for bidders to lodge unconditional bids so that the administrator can then evaluate the offers and identify a single preferred bidder. The deed administrators will report to the creditors on the outcome of the process shortly after the process is finalised by 30 June 2017.

Given the confidential nature of the process, KordaMentha have not publicly identified the short-listed bidders or the potential return to Arrium's creditors. However, I can confidently say that the short-listed bidders are reputable international companies that both intend to invest in the long-term future of Whyalla should they become the new owner of this business.

This government is on the record as offering a co-investment of $50 million with the new owners into projects that improve the commercial viability of Whyalla and secure the long-term future of steelmaking in South Australia. We have urged the commonwealth to commit to support investment in the long-term viability of steelmaking in this country as a nationally strategic industry. The commonwealth has committed at this stage of the sales process to consider financing projects through EFIC and the Clean Energy Finance Corporation. In fact, EFIC last year provided a $49.2 million concessional loan to buy machinery used to produce higher grade iron ore.

This government, through the Steel Taskforce, has been working hard to support the people and businesses of South Australia's second largest regional centre. We believe that the best outcome for the workers and suppliers who rely on Arrium for their livelihood is to support the successful conclusion of the ongoing sales process. Once a single bidder is identified, we will continue to work with that company and the commonwealth to identify the next steps required to support steelmaking in this country.

As KordaMentha has indicated, it wants to conclude the bidding process by 30 June. We have the next 4½ weeks to work with all those involved in this process to secure a successful outcome that can be accepted by the creditors. I am confident that with goodwill on all sides we can meet that objective. Federal industry minister Arthur Sinodinos and I are in regular contact, and we are committed to ensuring that we will do all we can to secure Whyalla's future. I remain optimistic that Whyalla's best days are still ahead of us and that we can secure the investment required from a successful bidder to entrench a long-term future for our steelmaking industry in this state.

We continue to support the people of Whyalla by offering a range of financial and counselling services and concessional loans so that the many businesses that rely on Arrium can continue to trade. We will continue to urge all governments, state and federal, to adopt our procurement policies that support Australian standard steel and we continue to advocate for effective trade remedies to ensure fair competition in the local steel market.

I look forward to further updating the house with more information as this process to secure the jobs and the future of Whyalla's workforce continues. The people of that city need a solution quickly. I hope that the commonwealth government continues to say the right things about supporting this sale process.

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