JOHANNESBURG (miningweekly.com) – The Australian government will provide a loan to collapsed South Australian company Arrium to support its iron-ore business and give its cash flow a boost.
Prime Minister Malcolm Turnbull on Friday confirmed that the Export Finance and Insurance Corporation would provide a A$49.2-million loan, which was first announced during his election campaign. The loan would be used for new machinery at the Iron Knob and Iron Baron mines, in South Australia.
The investment would enable the OneWhyalla business to process iron-ore to export quality and was expected to boost Arrium’s cash flow by more than $200-million over the next five years, Turnbull said.
Arrium entered into business administration earlier this year after a $927-million recapitalisation plan was rejected.
Administrator KordaMentha is now mulling the future of Arrium’s mines and businesses. The recapitalisation and sale of the group will be largely complete by the end of the year.