The Australian Government is to grant A$49.2m ($36.7m) in support for trouble-hit firm Arrium's iron-ore business and increase the company's cash-flow.
Australia Prime Minister Malcolm Turnbull said that the country’s export finance and insurance is offering the loan amount under the national interest account for new machinery purchase at the Iron Knob and Iron Baron mines.
Financing will enable Arrium’s OneSteel Whyalla business to process iron ore to export quality, in addition to maximising the company’s cash-flow by more than A$200m ($149m) over the next five years.
The latest investment builds on the government’s proposal to support Australia’s steel industry and will be used to upgrade 1,200km of rail line between Adelaide and Tarcoola, worth A$80m ($59.8m) to Arrium.
Turnbull said that the government will continue to work with administrator KordaMentha, which is planning for the sale of Arrium’s businesses.
Last month, the South Australian Government said it will offer A$50m ($37m) in funding to support Whyalla steelworks' new owner.
Australia Premier Jay Weatherill called for a bipartisan commitment from both major parties federally to contribute A$100m ($73m) towards the funding facility for Whyalla.
The new owner will receive A$150m ($110m) to support the long-term sustainability of steel-making at Arrium.
Whyalla was put up for sale after its parent company Arrium entered voluntary administration in April this year.