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No deal yet on Arrium pay cuts

AAP logoAAP 27/07/2016

Talks over a proposed pay cut for Arrium workers in South Australia are progressing but no agreement has been reached, the company's administrators say.

Administrators KordaMentha have proposed a 12 per cent cut as part of a three-year pay reduction strategy which also includes a 2 per cent rise in the final year.

The Australian Workers' Union has countered with an offer to reduce wages by 7.5 per cent.

The parties met on Wednesday and a spokesman for KordaMentha said they were approaching the discussions in good faith but no settlement had been reached.

He said a dialogue would continue on Friday, but whether that progressed to more formal talks was yet to be determined.

With Arrium's restructure and sale expected to be finalised by the end of the year, both parties are thought to be keen to resolve the deadlock.

Administrator Mark Mentha has identified a total of $300 million in savings designed to make Arrium more attractive to potential buyers.

The cuts, mainly in reduced supply contracts and savings introduced by previous management, would allow the Whyalla steelworks to break even this financial year.

Arrium was placed in administration in April after negotiations with its lenders failed amid sustained low commodity prices.

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