The first train carrying steel rail to upgrade South Australia’s rail network has rolled out of Arrium’s Whyalla steel mill, as part of a program aimed at keeping the struggling plant in business.
A newly executed contract between the Australian Rail Track Corporation, and KordaMentha – the appointed administrators of Arrium – will result in 73,000 tonnes of steel rail out of the Whyalla plant over the next three years.
Arrium, an ASX-listed mining and steel business, went into voluntary administration in April under a debt burden of more than $2 billion, exacerbated by a collapsed iron ore price.
One of the most public results of the company’s administration was the threat to jobs at the Whyalla steel mill.
The rail upgrade project was announced in March by Prime Minister Malcolm Turnbull, who said the mill could be kept open by supplying steel to upgrade a 600 kilometre section of ARTC railway between Adelaide and Tarcoola.
The existing 47kg per metre rail is being replaced with 60kg per metre rail, raising maximum axle weight from 23 tonnes to 25 tonnes at 80km/h.
ARTC boss John Fullerton said the Corporation had been busy finalising a careful, staged rollout plan for the project, but had focused on making early orders of steel.
“The existing rail between Adelaide and Tarcoola has been nearing the end of life and the new rail delivered by this contract will allow rail operators to carry heavier wagons of freight at faster speeds,” Fullerton said.
“This means ongoing benefits from this project for Australian businesses and ultimately, consumers.”
Federal infrastructure and transport minister Darren Chester joined federal member for Grey, Rowan Ramsay, and federal industry, innovation and science minister Greg Hunt at the Whyalla mill to witness the first train’s departure on September 8.
“We are boosting the economy and saving money for freight companies by upgrading this 1200 kilometres of rail to move more freight, faster between Adelaide and Tarcoola,” Chester said.
Ramsey said the contract would result in both direct and indirect jobs in the region.
“The contract helps secure an order of steel worth tens of millions of dollars, providing added volume through the Whyalla Steelworks and creating up to 130 direct and indirect local jobs on the re-railing project,” the local member explained.
Hunt said the Whyalla contract is not the only place the Coalition is supporting Australian steel work.
“In addition to using Arrium’s steel for the railway, we are supporting the industry by using Australian steel across our naval shipbuilding program and by strengthening Australia’s anti-dumping system,” Hunt said.
The Adelaide-Tarcoola upgrade is being fully funded by the Federal Government.