What has happened so far?

Arrium went into voluntary administration on Thursday 7 April 2016, initially appointing Grant Thornton to the role before being replaced 12 April by insolvency specialist KordaMentha.

KordaMentha has appointed 333 Capital, and on 28 July 2016 added Morgan Stanley to run the sale process of the Arrium Australian assets. The process will commence soon with the sale transaction of the combined steelworks, port and mining operations at Whyalla, together with its East Coast manufacturing, distribution and recycling businesses expected to be completed by the end of December 2016.

In the 2016-17 State Budget, handed down on 7 July 2016, nearly $70 million was allocated to support steelmaking, supply chain businesses and the community in Whyalla:

  • $50 million State Government Grant Facility
  • $9.6 million Whyalla Small Business Loan Scheme
  • $8.5 million Mental Health Funding
  • $300,000 Foodbank Whyalla.

In July 2016 the Commonwealth Government’s Export Finance and Insurance Corporation provided a loan of $49.2 million for new machinery at the Iron Knob and Iron Baron mines.

KordaMentha has begun the purchase of plant equipment required to sustain the Whyalla mining operations.

KordaMentha has advised local engineering firms and contractors will be used to help with the build and installation of that equipment at both sites.

Why is Arrium in voluntary administration? What does this mean?

Directors of a company may appoint an administrator if they believe the company is insolvent or likely to become insolvent.

The appointment of administrators allows a full investigation of the position of the company and to provide a detailed report to creditors.

All debts owed by the company prior to administration are frozen until further notice.

How will the State and Commonwealth Governments support Arrium and its workers?

The State Government is committed to regional South Australia and will work with the Commonwealth Government, the administrator KordaMentha, and other key stakeholders to assist the Whyalla community.

The State Budget 2016-17 handed down on 7 July 2016 included nearly $70 million to support steelmaking, supply chain businesses and the community in Whyalla:

  • $50 million State Government Grant Facility
  • $9.6 million Whyalla Small Business Loan Scheme
  • $8.5 million Mental Health Funding
  • $300,000 Foodbank Whyalla.

Regional Coordinator
The State Government has appointed Paul Case as the Regional Coordinator for Whyalla. Paul’s role is to engage with the community, including businesses, individuals, local government and associations to understand their needs and ensure that appropriate services are being delivered to the community. Paul is as the first point of contact for the Whyalla community.

Program Manager
Tim Coote from the State Government is based at Whyalla and works with the Regional Coordinator. Tim’s role is to ensure the community of Whyalla has somewhere to go to seek information, clarification and an understanding of Government initiatives and available support programs.

Paul and Tim are located within the Regional Development Australia’s (RDA) Whyalla Office at:
127 Nicolson Avenue,
Whyalla Norrie.

For more information or to contact Paul or Tim ring the hotline on 1800 805 939 or email [email protected]

The State Government provides a range of services and support for local people including:

  • A hotline for workers to contact to discuss the support available through the South Australian and Federal Governments. For more information about the support available for workers and the community call the hotline 1800 805 939.
  • Free financial counselling – from accounting firm Hood Sweeney for Whyalla businesses. For more information call 1300 764 200.
  • Loan scheme – The State Government has announced an interest-free loan scheme to support small businesses experiencing cash-flow challenges as a result of Arrium entering administration. The interest-free loans of up to $750,000 will be available to South Australian businesses and applications for loans will be considered on a case by case basis and provided over a term of up to three years. Applications are open and interested businesses can contact Hood Sweeney’s Whyalla office on 1300 764 200 for further information.
  • Legal advice – A senior lawyer from Thomson Geer, Michael Barrett, has been engaged to represent small businesses that are contractors to Arrium in their dealings with the administrators. For more information visit www.tglaw.com.au or call (08) 8236 1130.

The Commonwealth Government has announced $1.1 million in assistance for workers who will lose their jobs at Arrium, including workers at the steelworks in Whyalla.

What other State Government programs are currently available to support training and employment opportunities in Whyalla?

The State Government provides a range of services and support.

Skills and training

WorkReady is a South Australian Government initiative that provides opportunities to participate in training, skills development and   employment projects that lead to employment.

Career services

Career Services are delivered by experienced career practitioners, who can support you with career advice, the development of a career plan and assistance to transition to new employment.

Family support

Building Family Opportunities provides families with a case manager who assists family members to find a job and participate in education and training while also helping to find solutions to issues specific to individual families such as housing, finances, health and mental health and family resilience.

For information about training, employment pathways and skills visit www.skills.sa.gov.au, call 1800 506 266 or email [email protected]

What is the State Government’s new steel industry policy and how will it support the steel industry in Australia?

All steelwork procured for public works in South Australia will now be independently tested and certified to Australian standards. Steel will have to be sourced from mills with Australasian Certification Authority for Reinforcing and Structural Steel third party certification and for steelwork to be supplied from fabricators independently certified to the recently created National Structural Steelwork Compliance Scheme.

Why is this new policy required?

Preliminary findings of the Anti-Dumping Commission are that dumped steel products from China appear to have caused material injury to the Australian steelmaking industry. The commission has imposed preliminary dumping securities on steel reinforcing bar (rebar) and steel rod in coil imported from China as part of an ongoing investigation into allegations of unfair and damaging trade.

While in South Australia we have earmarked $10 billion for public works, this is only a fraction of the $200 billion that is slated for spending on infrastructure across the nation. Recent BIS Shrapnel analysis found that a shift nationally to 90 per cent local supply of steel for public infrastructure would increase annual domestic production to 1.5 million tonnes within the next five years alone. The study found that cumulative production of an additional 3.4 million tonnes during the five-year period would add $4.3 billion to Australia’s real GDP.

It is important to ensure South Australian steelmakers and fabricators have a competitive advantage against lower-quality imports.

For more information about the policy contact South Australia’s Industry Advocate.

How will the certification process work?

The South Australian Office of the Industry Advocate is working with South Australia’s Steel Taskforce (established in November 2015) to form a third party audit to ensure State Government projects adhere to the new policy.

For further information on the certification process contact the Office of the Industry Advocate.

Will certification mean a cost increase to the steel fabricator?

The compliance certification requirements will help ensure that steelwork fabricators are meeting the base requirements of Australian Standards. The compliance process involves an initial minor cost and process review, however, experience from fabricators who have been certified is that they quickly recoup this through rework savings and the State Government is providing some funds to offset this cost.

How can I determine whether a steel mill or a fabricator is third party certified?

Refer to the Australasian Certification Authority for Reinforcing and Structural Steels (ACRS) for certificate holders or Steelworks Compliance Australia (SCA) for certified fabricators.

As an engineer does this compliance requirement reduce my risk in regard workplace safety duty of care and the risk of potential failure and safety?

The harmonised Workplace Health and Safety Act 2011 puts significant shared responsibility on the importer, manufacturer, supplier, builder and engineer.  State authorities have confirmed that material and product compliance is an essential component for the solution to safe design and construction.

For what steel products does the policy cover?

For the steel itself third party certification through ACRS covers the Australian Steel Standards for welded beams, hot rolled beams and columns, structural plate, and structural tube and pipe. For reinforcing, it covers bar, coil and mesh, and pre and post tensioning strand is also covered by ACRS third party inspection and certification.

For the National Structural Steelwork Compliance Scheme, it covers all the fabrication, welding, bolting and coating specifications referred to and covered by the two design standards:

  1. AS4100. General Structural steel fabrication   Load carrying structures for buildings and other structures – it is referenced through the Building code of Australia (BCA)
  2. AS/NZS 5100.  Bridges design of steel and steel-concrete composite bridges and is referenced by the state transit authorities for bridge construction.

These design codes reference all the steel and workmanship specifications that are covered in the SCA audit.