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Workers Vote Down Arrium Request for Pay Concessions
03/10/2016 - Approximately 400 unionized iron ore miners at Australia’s Arrium have rejected the company’s request for wage concessions, saying they won’t agree to it until the company provides a clear financial plan for continuing operations, according to Australian broadcaster ABC.
According to the ABC, Arrium had asked the miners forgo a contractual 3 percent wage increase, plus agree to take a temporary 10 percent pay cut on top of it.
Arrium, which mines iron ore and produces steel, is buckling under the weight of its debt. It owes lenders AUD2.3 billion, and it has said it may have to shutter operations if it can’t cut another AUD60 million from its Whyalla steel works in South Australia and cut its mining costs by a third.
The company, along with U.S.-based GSO Capital Partners, have put forth a recapitalization plan, which lenders are considering. But they’re also considering whether to develop their own plan or potentially ready the company for insolvency, according to The Australian Financial Review newspaper.
Meanwhile, Australian officials have been discussing a potential bailout package, and earlier this week, Prime Minister Malcolm Turnbull said the company will be given no-bid contracts to replace about 600 kilometers of track maintained by Australian Rail Track Corp., according to The Sydney Morning Herald newspaper.
The Whyalla works is Australia’s only domestic rail manufacturer.
Although Turnbull did not say how much the orders would be worth, one estimate valued them at about AUD80 million, The Herald reported.
Arrium, which mines iron ore and produces steel, is buckling under the weight of its debt. It owes lenders AUD2.3 billion, and it has said it may have to shutter operations if it can’t cut another AUD60 million from its Whyalla steel works in South Australia and cut its mining costs by a third.
The company, along with U.S.-based GSO Capital Partners, have put forth a recapitalization plan, which lenders are considering. But they’re also considering whether to develop their own plan or potentially ready the company for insolvency, according to The Australian Financial Review newspaper.
Meanwhile, Australian officials have been discussing a potential bailout package, and earlier this week, Prime Minister Malcolm Turnbull said the company will be given no-bid contracts to replace about 600 kilometers of track maintained by Australian Rail Track Corp., according to The Sydney Morning Herald newspaper.
The Whyalla works is Australia’s only domestic rail manufacturer.
Although Turnbull did not say how much the orders would be worth, one estimate valued them at about AUD80 million, The Herald reported.
