Arrium voluntary administration means up to 8000 jobs are at risk in Australia

THE Federal Government has asked banks to allow Arrium to trade out of insolvency, with thousands of jobs now at risk.

Minister for Industry Christopher Pyne at a press conference at Parliament House in Canberra on Friday, March 18, 2016. (AAP Image/Mick Tsikas) NO ARCHIVING

THE Federal Government and Labor have urged banks to allow steelmaker Arrium to trade its way out of its difficulties, with up to 8000 Australian jobs on the line.

But the Opposition wants the government to go further and put in place a national steel plan.

The South Australia-based steelmaker and mining group was placed into voluntary administration on Thursday, threatening 1000 jobs in Whyalla, SA, which also puts at risk another 7000 jobs across the country.

For the moment workers are still being paid and turning up for work at operations in SA, Queensland, NSW and Victoria.

Industry Minister Christopher Pyne, who is the most senior Liberal MP in SA, has urged Arrium’s lenders to give the company a break.

“The surest way for the banks to receive their money back from Arrium, the $2.8 billion that they owe their creditors, is for Arrium to trade out of its difficulties,” he told reporters in Sydney on Thursday.

Arrium worker Lee Rodda with daughters Gabby, 11, and Ella, 10 outside his Whyalla home. Picture: Tom Huntley

The three main Arrium businesses could either break even or be profitable “in the right circumstances”, he said.

“Out of these ashes of Arrium could be a phoenix which will rise and provide the jobs and growth in the economy that we all want to see for the workers,” the minister said.

Mr Pyne said neither the company nor the administrator had asked the government for a direct bailout, but had sought measures to stem the impact of unfair foreign competition.

Abolishing the carbon tax, anti-dumping measures and bringing forward the purchase of steel for the Adelaide-Tarcoola link of the trans-Australian railway had been of benefit.

Any further help would be done in a “very methodical, sensible, calm way, without politics”.

Opposition Leader Bill Shorten wrote to Prime Minister Malcolm Turnbull in February seeking bipartisan support for a strategy to shore up the Australian steel industry.

“Our thoughts are with Arrium’s workers and the entire Whyalla community at this time of uncertainty,” Mr Shorten said on Thursday.

A national steel plan would involve working with steel producers and their supply chains to maximise the use of Australian steel in government-funded infrastructure projects.

He called for the Australian Jobs Act — which gives local manufacturers the opportunity to win work on large Australian projects — to be kept in place.

And a local employment co-ordinator should be reinstated.

Labor industry spokesman Kim Carr said the dumping of cheap, substandard foreign steel was harming local makers and the government needed to “find the bottle” to fix the problem.

Greens senator Peter Whish-Wilson said Australia should take action in the World Trade Organisation.