Mining and Heavy Industries

Jobs to go as Arrium tightens belt at Whyalla

Beleaguered iron ore and steel business Arrium will cut as many as 250 jobs at its Whyalla steelworks, as part of a $100m cost reduction and productivity improvement program.

Arrium announced the job cuts on Monday, a day prior to its annual general meeting.

Speaking at the AGM on Tuesday, managing director and chief executive Andrew Roberts explained the company’s position.

“Global steel overcapacity means a step change in our cost base is required to maintain the competitiveness of the business,” Roberts said.

“To improve the viability and sustainability of our Whyalla Steelworks, we have targeted approximately $100m of annualised cost reductions and productivity improvements.

“We have already made good progress towards the Whyalla Steelworks target with approximately $60m of the $100m already identified.

“This is being achieved through a recent upgrade to the structural mill reheat furnace that is delivering lower gas costs, a restructure of our magnetite pelletising stream that will provide lower cost ore to the blast furnace,  and through a reduction to the steelworks’ labour cost …”

Arrium must still identify a further $40m in annual savings at the steelworks for it to remain viable, Roberts foreshadowed.

“In steel, significant global overcapacity has led to dumping becoming a global problem,” he detailed. “Exports from China alone are now over 100mtpa, and this, combined with record low steel prices, is leading to significant global market distortions.”

In response to the job cuts, Australian Workers Union boss Scott McDine said federal industry minister Christopher Pyne needed to urgently convene an emergency steel summit.

“The Australian steel industry is now in full blown crisis and yet our politicians continue to sit on their hands,” McDine said.

“It is not good enough for Mr Pyne to remain silent as employment continues to spiral in his state. It is not good enough for [South Australian Treasurer] Tom Koutsantonis to simply shrug his shoulders and say he can’t do anything about the international iron ore prices.”

McDine said there were many viable options that could be discussed at an emergency summit.

“There is plenty we can be doing on the home front,” he said.

“We could look at doing what every other steel producing nation in the world does and take some proactive steps to ensure our industries are not slaughtered by Chinese dumping.

“We need to strengthen anti-dumping measures and we also need to be following the global example and introducing local steel procurement policies on government infrastructure.

“Dumping the carbon tax may have done little to help Whyalla steel, but that doesn’t maena there aren’t more effective ways to assist.”

AWU South Australian acting branch secretary Peter Lamps said the union would be seeking further discussions with Arrium.

“The AWU will be seeking urgent meetings with Arrium management to ensure there is clarity about this process and that workers receive their full rights and entitlements,” he said.

“But in the long run we simply cannot allow this trend to go on. We need urgent action from our politicians at all levels to consider the range of options they have to look after our vital industries and regional communities.”

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