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Arrium administrator outlines hurdles to steelmaker's sale

Wednesday, 3 Aug 2016 06:25:35

Pay rates and electricity generation remain key issues for the Arrium administrator. (ABC News: Nick Harmsen)

Arrium's administrator says electricity generation and a new workforce agreement are key issues to be resolved before the Whyalla steelmaker can be sold.

Mark Mentha briefed an informal gathering of the Whyalla public and council members on Tuesday night about the progress of the administration.

The South Australian industrial city is facing uncertainty because Arrium, its biggest employer, went into administration in April with debts of more than $4 billion.

Mr Mentha said a proposed pay cut was still being negotiated and the matter would go to a vote later this month.

He said if the proposed new award was accepted, and on-site power generation improved, there would be an improved chance of selling the company.

"I think it's a significant opportunity, not only for Arrium but for Whyalla and for South Australia, if the upgrade of that power plant can be done in a way that takes Arrium out of the grid but also provides it with an opportunity to supply other businesses," he said.

Renewable energy focus for Whyalla

Acting Mayor Tom Antonio spoke of the need for both the company and the community to focus on the future.

"There are no rear-vision mirrors here. I mean we have to look forward for the future and viability of the city," he said.

"The other thing that we've got to look at is to point out some opportunities that we have to embrace, and those opportunities are renewable energy, and we know that's the case.

"I can tell you, Whyalla will be at the forefront of creating renewable energies."

Mr Antonio said that more than three months after Arrium went into voluntary administration, the community was in need of a resolution.

"You can stay underwater 10 seconds, then go 20 seconds, then 30 seconds [but] there comes a point where you can't breathe underwater and hold your breath for much longer, so it's come to that point we now have to make it work," he said.

"We're working tirelessly with the administrators, with the Federal Government, the State Government, together to make sure we come out of this."

Mr Mentha said decisions that led to the company's woes were something to be investigated in the longer term.

"Everyone suffers from mistakes, but what we're really focused on is looking forward, selling this business on its forward projections and capability, selling it with an investment strategy and mill upgrade opportunity that may come with a new bidder and with government assistance," he said.

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