Prime minister Malcolm Turnbull has dismissed a proposed bailout of Arrium’s steelworks in Whyalla, South Australia, describing it as premature.
State premier Jay Weatherill has written to Turnbull and opposition leader Bill Shorten seeking a $100m commitment to the troubled operations to go alongside a $50m state government pledge that was unveiled on Thursday.
Shorten on Thursday said he would meet Weatherill to “look at the options” and urged the prime minister to join the discussion.
But Turnbull ruled out further funding until a government-commissioned review by expert adviser Russell Caplan was completed.
“It would be premature for the Australian government to make any further financial commitments until Mr Caplan’s assessment of Arrium Whyalla and the administrator’s request for financial assistance have been finalised,” Turnbull wrote in a letter to Weatherill.
The prime minister said he looked forward to working with Weatherill to support the Whyalla steelworks’ long-term viability.
A new buyer for Arrium – which was recently placed into administration – may be eligible to apply for a loan of up to $100m through the Export Finance Insurance Corporation and Clean Energy Finance Corporation, he added.
Shorten said the future of steelmaking was “more important than the day-to-day politics” of the election campaign.
“I’ll meet with Mr Weatherill to look at the options and urge Mr Turnbull to join us,” he said. “I don’t want this to be a political football. We should be working together to find a decent solution.”
Arrium was placed in administration in April after failed negotiations with its lenders amid sustained low commodity prices.
Administrator KordaMentha expects the company to attract genuine interest, with the restructuring and sale of the group to be finalised by the end of the year.
Lead administrator Mark Mentha on Thursday said a potential assistance package would provide a shot in the arm for Whyalla.
“It’s a great response to what has been an unbelievably strong display of unity by all stakeholders in the Arrium businesses,” he said. “This will make Arrium a much more attractive and sustainable proposition for potential investors.”
A South Australian steel taskforce has been working with Arrium and KordaMentha on an assistance package to ensure the long-term viability of the Whyalla plant which employs about 1,600 people.
It is proposed any government funding could be accessed only by a new owner of the company to support the Whyalla operations.
