Wednesday, 21 June 2017
Questions without Notice
My question is to the Minister for Industry, Innovation and Science. Last week it was announced by the administrators of Arrium, KordaMentha, that private equity firms Newlake Alliance Management and JB Asset Management relying on POSCO technology from South Korea are the preferred consortium to take over the Arrium steelworks at Whyalla. Since then, the British steelmaker Liberty House has increased its bid price. Noting that both bids are contingent on varying types and levels of federal government support and that the choice of the successful bidder is up to the committee of creditors, can the government advise what due diligence has been and will be carried out in respect of each proposal?
I thank the honourable senator for his question, of which he gave some notice. As the good senator said, the administrator KordaMentha has announced a preferred bidder, Newlake. It is not the government who decides the bidder; that is KordaMentha and the Arrium committee of creditors. KordaMentha have of course undertaken extensive due diligence on the validity of each of the proposals in coming to their determination. We as a government are involved in the process and are holding discussions with the preferred bidder announced by KordaMentha. The government has always said it would engage with those who have a long-term plan for Whyalla for a sustainable, globally competitive steel industry. That is what we want. We want jobs that will last there for 10, 20 and 30 years. That is what we are about.
In regard to requests of government in the process, the Commonwealth and South Australian governments have in place a task force that is jointly assessing any requests for government support. That task force is supported by financial and technical advisers on both sides. Any government support will of course be supported by appropriate due diligence and subject to key conditions to ensure that there is a long-term plan for Whyalla.
Will the minister be engaged also with Liberty House, given that they are making an alternative bid—so, will there be a genuine engagement with both parties? What is the government's view in relation to the steelmaking track record of each of the bidding entities, and what is the government's assessment of the two radically different technology options being proposed by the bidders, given that there could be Commonwealth involvement in this bid?
The Arrium sale process is at a sensitive stage, and the process is run by KordaMentha, not by the government. As I have said, we are in the process of discussions with the preferred bidder as set out by KordaMentha. At this stage it would not be appropriate for me to stand up now and give a public assessment of the details of each of the bidders' proposals, which are of course confidential. As I made clear, the cross-jurisdictional task force that is looking at these matters is well supported by financial and technical advisers on both sides.
On the point of order, the minister was directly relevant in relation to other matters of your question—you had three points to your question. And the minister did indicate the sensitive nature of the situation at the moment. But I will invite the minister to respond to your point of order if he wishes to.
To put it on the record, the federal government has engaged with both Liberty and Newlake. KordaMentha has made a decision as to the preferred bidder and entered into a process. That is the basis on which we are proceeding.
Does the government acknowledge the strategic importance of steelmaking in this country, and will the government be giving consideration in its deliberations to the track records of the respective bidders in relation to maintaining and growing their workforces in the context of their plans for Arrium?
Firstly, let me say we are committed to a strong, globally competitive steel industry. Now, they are big conditions and there is a lot of work to be done in that regard, and we are working on that. But, as I said before, KordaMentha have announced a preferred bidder. We are now working on what we in South Australia can do with regard to possible government support.