Premier Jay Weatherill promises $50m to save Whyalla’s Arrium steelworks

PRIME Minister Malcolm Turnbull says it is “premature” to throw money at Arrium, after the State Government pledged $50 million of SA taxpayers’ money to the plant and called for double that from Canberra.

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PRIME Minister Malcolm Turnbull says it is “premature” to be throwing money at the troubled Whyalla steelworks, after the State Government pledged $50 million of SA taxpayers’ money to the plant and called for double that from Canberra.

Federal Labor Leader Bill Shorten has said he plans to meet Premier Jay Weatherill soon to consider a rescue plan for the ageing plans and thousands of reliant jobs.

Arrium’s administrators are expected to put the debt-laden steelworks on the market next month and there are understood to be at least three parties interested in a purchase.

Mr Weatherill told State Parliament Arrium’s future was a matter of national significance.

He said both federal parties should commit $100 million to give a total package of $150 million that could be matched by a buyer to unlock a major steelworks overhaul.

“Without this support from state and federal governments, it is our belief that steelmaking in Whyalla is unlikely to continue,” Mr Weatherill warned.

Jay Weatherill said Arrium’s future was of national importance. Picture: Campbell Brodie

Mr Weatherill said terms of the handout to any buyer should include a promise to invest private funds and support the long-term sustainability of Whyalla steelmaking.

He said the figure was arrived at following close analysis of Arrium’s operations.

“This is a large and important request but would be allocated to technological efficiencies or upgrades in the Whyalla operations to ensure the taxpayer money is spent to benefit thousands of jobs at Arrium and in the wider supply chain,” Mr Weatherill said.

In a letter to Mr Weatherill, Mr Turnbull said that he was committed to the steel industry.

Mr Turnbull said the Federal Government had already appointed an independent expert, Russell Caplan, to examine the best way to secure the plant for the long term.

“It would be premature for the Australian Government to make any further financial commitments until Mr Caplan’s assessment of Arrium ... have been finalised,” he wrote.

He said a loan of up to $100 million could be unlocked under an existing scheme.

Mr Shorten also stopped short of promising to tip in additional cash.

“Labor understands the importance of Arrium to the people of Whyalla and the South Australian economy. With around one in six of Whyalla’s workers being employed by Arrium, it is the heart of their community,” Mr Shorten said.

“We also believe steel is a strategically-significant industry for Australia. Local steel is the backbone for new rail, road and construction projects. The ability to make our own steel is also critical for major projects in defence.”

Administrator Mark Mentha welcomed the $50 million offer. “This will make Arrium a much more attractive and sustainable proposition for potential investors,” he said.