Mining and Heavy Industries, Staffing, Recruitment & Training

Labor pitches local content plan to save steel


As administrators work out what to do with collapsed South Australian steelmaker Arrium, the Federal Opposition has launched a six-point plan it says will save the metals manufacturing industry.

Arrium went into voluntary administration earlier this month.

The iron ore and steel business has struggled to compete with Chinese steelmakers and a slumping iron ore price.

A debate ignited last week after Opposition leader Bill Shorten called for the mandated use of Australian steel in government-funded infrastructure.

Shorten’s idea was rejected by the Government’s treasurer, Scott Morrison, who said any such mandates would potentially violate free trade agreements.

Nonetheless, Labor late last week pitched a six-point plan it says will save the country’s metals manufacturing sector from total collapse.

In a joint statement with industry shadow minister Kim Carr, Shorten said an elected Labor Government would:

  • ensure Australian standards are upheld in Federal Government funded projects, and support local producers to meet certification standards
  • seek to maximise the use of locally-produced steel in Federal Government funded projects and put in place regular reporting of usage levels
  • halve the thresholds for projects required to have an Australian Industry Participation Plan from $500 million down to $250 million for private projects, and from $20 million to $10 million for public projects
  • double funding for the Australian Industry Participation Authority and appoint an AIP Board
  • ensure Australia’s anti-dumping system has the right powers and penalties in place
  • create a national Steel Supplier Advocate

“Being an advanced economy that can make things here at home means ensuring Australia’s strategic industries have a sustainable future,” Shorten said.

“To secure the long-term future of our local metal industries, we need to make smart use of the opportunities in front of us and build on Australia’s natural strengths.”

Shorten made his pitch as KordaMentha, the appointed administrator in charge of Arrium, negotiated a deal to halt court action by US bank Morgan Stanley.

The deal, according to Fairfax, effectively moved Morgan Stanley back into the queue with all the other companies Arrium owes money; a list which includes 19 other financial lenders.

Around 100 workers reportedly watched a live stream of a creditors meeting KordaMentha held in Sydney on Tuesday, according to the ABC.

The ABC reported KordaMentha’s Mark Mentha told creditors that Arrium would continue to operate for its customers, for now.

“You’ve got the advantage of not having paid creditors from the time prior to our appointment and we continue to make sales with goods that have been supplied, so we’re in a very strong cash position,” Mentha was quoted to have said.

“I think that’s one of the advantages of the voluntary administration; it’s shored up the business.”

Creditors are understandably upset over the money they haven’t been paid, however.

One such creditor, also quoted by the ABC, was Hal Longhurst from Acclaim Hydraulics.

“I understand next creditors meeting is theoretically four weeks plus away,” Longhurst reportedly said.

“For smaller family-owned businesses, we’d all like to see this company recover, but I’m not going under for it, so is there anything more definitive than frozen in time?

“Like everybody in this room, we traded in good faith … we did everything we were told to do, and now we’re working out how to borrow money to pay employees, because people won’t pay their bills.”

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