South Australia’s Treasurer Tom Koutsantonis has appealed to Malcolm Turnbull to help SA’s troubled mining company Arrium and its Whyalla steelworks as it faces the loss of up to 1,200 jobs.

“I would like to see the same type of energy and fervour … the Commonwealth government’s employed around our borders to protecting steel.”

In a week that saw Mr Koutsantonis convene a Steel Summit in Adelaide and launch a social media campaign to support domestic steelmaking, Arrium this week reported a first-half net loss of $235.8m and warned it needed to find $60m in savings to keep the Whyalla plant operating.

With a fall in iron ore prices a major factor in Arrium’s downturn, Mr Koutsantonis said successive Commonwealth governments were to blame for allowing cheap imports of steel to decimate Australian steel producers over the past decade.

“I would like to see the same type of energy and fervour … the Commonwealth government’s employed around our borders to protecting steel,” he said.

With the state facing the highest unemployment rate in the nation, the Weatherill government has been in discussions with Arrium for months over a potential bailout package. Last year Bluescope’s steelworks at Port Kembla, NSW, received assistance worth $200m from government and unions.

At this week’s Steel Summit, Mr Koutsantonis called upon federal and state governments to unite with South Australia to ensure the continued success of the steel sector.

“Our steelmakers and fabricators are facing major challenges and low-cost imports from countries with inferior quality standards than Australia. This is having a detrimental impact on our steel industry.”

In response to growing evidence of unfair trade practices and inferior imports, late last year South Australia adopted a new steel policy that mandates all future state government-funded construction projects use only certified Australian-made steel.

A Steel Taskforce set up by the SA government has been tasked with designing initiatives that ensure steelmakers and fabricators can compete fairly for local contracts, giving the industry a competitive edge against low quality imports.

With a budget of $4.3 million in funding over four years, the taskforce will assist the South Australian steel fabrication sector to become compliant with Steelwork Compliance Australia requirements.

Independent Senator for South Australia, Nick Xenophon, foreshadowed a Senate Motion to be introduced next week demanding that the federal government only provide funding to state governments for infrastructure projects if there is a strong local procurement policy in place.

In particular, Senator Xenophon is asking that NSW and the Commonwealth fall into line with South Australian procurement policies which require that steel must be of an Australian standard.

“All I want is for Australian governments to stand up for our national interest in the same way other governments such as the US and Chinese governments stand up for the national interests of their industries and citizens.
“Any procurement rules must acknowledge the massive economic multiplier effects of local procurement rather than money and jobs being sent offshore,” said the senator.

According to a BIS Shrapnel report for the Australian Workers’ Union, only 49 per cent (633kt) of steel used in publicly-funded projects in 2014/15 was sourced from the domestic market, while 653kt was imported.

The report estimated that achieving a 90 per cent local content policy would cost the public sector an average of $61 to $80 million extra annually, but would add a cumulative $1.3 billion to real GDP over five years.