Last Friday was a great day for an estimated 5,500 Arrium workers who were finally reassured that their jobs are secure, after British billionaire industrialist Sanjeeve Gupta signed a deal to purchase the Arrium steelworks and mining operations at Whyalla, which was placed in administration last April with an accumulated four billion dollar debt.
“The people of Whyalla have been through a terrible time in the last 15 months but for us closure was never an option,” said former deputy mayor of Whyalla Tom Antonio, in an interview with Neos Kosmos.
Antonio, who was acting mayor when Arrium went into voluntary administration, had promised the people of Whyalla that he will do everything in his power to guarantee the future of the town.
“Arrium is the region’s biggest employer directly employing more than 3,000 people just in Whyalla, while thousands more jobs are reliant on the company, so closure would have been devastating to the future of our town and the broader South Australian economy,” explains Antonio.
“My job was to bring all levels of federal and state governments to the table to ensure closure was not going to be an option because if the steelworks closed down the effect it would have had for the whole of South Australia would have been catastrophic,” explains Antonio who ensured that every politician of influence, from the Prime Minister and below, either visited Whyalla or was advised about the tremulous situation in SA’s third most populous city.
“We all worked together to get the result we see today, whilst Korda Mentha administrators managed to bring together the federal, state and local governments and potential buyers and they moulded into a situation where we were able to sell to a perspective buyer,” he said.
According to Antonio, as soon as Arrium went into voluntary administration, all its workers agreed on a 10 per cent pay cut to make the business viable and more attractive to potential buyers.
“The people of Whyalla are the ones that sacrificed an enormous amount to the benefit of the community in order to make the business more attractive to be purchased and they are the ones that should be commended for what they did.”
With a global turnover of $12.5 billion, London-based GFG Alliance, with a strong mining and steelworks record, has agreed to purchase the Arrium Group of companies but the sale is still subject to approval by the Arrium committee of creditors and the Foreign Investment Review Board. That process is expected to be completed by the end of next month.
“During my discussions with the Local Government Association, I put up a motion for all the councils of the state to look at their procurement policies so they could buy Australian-manufactured steel. Every single council in Adelaide voted unanimously to change their procurement policies so that they could buy Australian-made steel which I was so grateful for,” revealed Antonio.
“That same motion was then taken to Canberra and passed; this means that all the councils in Australia put their best foot forward to buy Australian-manufactured steel. Within three-four months, the orders started coming in thick and fast so it became more viable for someone to purchase the steelworks.”
Korda Mentha told the media that once the sale was completed it would continue with the business of administration, including finalising returns to creditors.
Executive chairman Sanjeev Gupta said GFG would continue to explore business opportunities in Australia, including the renewable energy and mining sectors.
“Mr Gupta has a track record of investing in the steel industry all over the world and comes across as an honest man and a savvy businessperson, so I feel really positive and confident of his company taking over,” said Antonio.
Following the sale’s public announcement, the British business operator said he was thrilled to acquire Arrium and confirmed that the deal would secure more than 5,500 jobs.
“We aim to leverage the advantages of integration across the value chain, from raw materials and metal production to high-end engineered products. The Arrium business fits perfectly with this strategy and we believe it has an exciting future leveraging our Greensteel vision, which has been well proven in the UK,” said Gupta while South Australian Premier Jay Weatherill referred to the acquisition as “a great victory for Whyalla, an extraordinary victory for South Australia and a very important victory for our nation.”
Although the cost of the sale has not been disclosed, it is estimated at $700 million whilst the state government has budgeted a $50 million contribution.
“This has been an extraordinary turnaround from the brink of collapse to now a very bright future. I think there’s going to be reinvestment in the steelworks. I have spoken to Mr Gupta to offer my congratulations and he reaffirmed his strong commitment to the long-term future of the Whyalla operations,” said Weatherill when asked about Whyalla.
“The sale of the whole of the business is a dramatic victory for us here in SA.
“Any self-respecting nation needs its own capacity to create steel products. This is about building our nation, it is about building our national infrastructure and we cannot be beholden to other countries for a steel industry,” concluded the Premier while SA Treasurer Tom Koutsantonis appeared slightly more reserved saying that it was “far too early” to discuss details of the deal but “the state government is well advanced in its discussions” with the federal government “about what we can offer.”
“This city is completely linked to the operations of the steelworks.
“Think of the pressure that this community has been under. There have been divorces, financial stress and redundancies. We finally now have clear air,” said Koutsantonis.
Senator Nick Xenophon told the media that he understood the new owners hoped to export steel from the Whyalla plant to Europe to build the business but touched on the need for the state and federal governments to prioritise the use of Australian steel in taxpayer-funded projects and strengthen anti-dumping rules.
“Our anti-dumping laws, while they’ve improved, are still relatively weak compared to other countries in Europe, the US and Canada. So we have to have a level playing field,” he said.
Federal Treasurer Scott Morrison and SA Opposition Leader Steven Marshall also welcomed the outcome.
“Everybody is ecstatic, we [have] secured the future of our children and we [have]managed to get our message across and save Whyalla.
“We couldn’t be happier,” concluded Antonio.