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Arrium admins may seek fresh pay vote

AAP logoAAP 24/08/2016 Michael Ramsey

The administrators of troubled steelmaker Arrium may seek a fresh vote on a proposed pay cut for workers at the company's Whyalla operations.

A slim majority of Whyalla steelworkers on Wednesday voted down a new enterprise bargaining agreement which included a 10 per cent pay cut and changes to superannuation.

Mining workers at Whyalla separately voted in favour of taking the same pay cut but administrators KordaMentha have ruled out implementing one pay deal without the other.

The pay impasse comes as investment banker Morgan Stanley holds talks with potential bidders for the company in Japan and South Korea.

The current EBAs are due to expire at the end of next week, leaving potential buyers with no certainty on future pay deals.

Lead administrator Mark Mentha said the administrators would consider seeking a fresh vote after the proposed steelworks pay deal fell just 25 votes short of passing.

He conceded there was a need to engage a large number of employees who had declined to vote but said the administrators had ruled out accepting a softer pay cut.

"We're not looking to renegotiate any of the terms of what's already been a very lengthy process," he told ABC Radio.

It's understood the new agreements would have saved Arrium about $18 million per year.

Mr Mentha admitted the lack of certainty would make it difficult to find a buyer for the company.

"Without doubt, the opportunity to have an enterprise agreement that goes for four years provides a really stable investment backdrop for a bidder," he said.

"We need to reflect on the communication of that message to the employees over the last couple of weeks."

KordaMentha have identified a total of $300 million in savings designed to make Arrium more attractive to potential buyers but are seeking additional government assistance.

The federal government has offered Arrium a $49 million loan for new machinery to produce a higher grade iron ore from two of its mines and the SA government is kicking in another $50 million.

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