The South Australian government said on Thursday it would provide A$50 million ($37 million) in funding to help keep Arrium Ltd's loss-making Whyalla steelworks open under a new owner.

State Labor premier Jay Weatherill has also pressed Australia's two major parties to commit to contribute A$100 million from the federal government to help keep Whyalla open.

"The Arrium operations at Whyalla are critical to both South Australia and the nation as a whole - it is essential that we retain our sovereign steel-making capability," Weatherill said in a statement.

The call on national politicians to support Whyalla came amid heavy campaigning in South Australia for the July 2 federal election, as the Liberal National coalition faces a potential loss of seats in the state.

Arrium, an iron ore miner and steel producer, went into voluntary administration in April, hit by weak iron ore and steel prices. Administrators have put its best business, U.S.-based Moly-Cop, up for sale.

Two U.S. private equity funds, Cerberus Capital Management and Argand Partners, are eyeing Arrium's businesses, provided a co-investment package from the government for Whyalla makes it enticing enough to be part of a future buyout, the Australian Financial Review reported last month.

 

Source : reuters.com

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