FIRB threatening to block acquisition of Arrium Mining and Materials

The sale of Arrium will not be allowed to go ahead unless overseas bidders can guarantee that the company’s Whyalla steelworks plant will stay open for up to a decade, according to reports.

Mining and materials company Arrium went into voluntary administration last year, following a series of losses at its iron ore and steelmaking businesses.

Several foreign buyers have indicated their interest, but the Foreign Investment Review Board is said to be threatening to withhold approval unless the buyer can give an undertaking to keep the Whyalla plant open for 7 to 10 years.

Possibly in view of the government’s tough stance, Canadian giant Brookfield, Korea’s Posco and private equity firm Newlake are now thought to have withdrawn from the process.

Analysts suggest that the profitability of the Arrium’s iron ore mining operations and its east coast steel business mean that a buyer willing to agree to the conditions could still be found.