Adani is on track to announce plans to use steel from Arrium’s Whyalla steelworks for its railway line extending from its Carmichael project in Queensland.
If the Carmichael coal project is approved, it is understood that Adani will source 56,000 tonnes of steel from Arrium for its 400km railway line in the Galilee basin, between the Central Queensland mine and the port at Abbott Point.
The Arrium steelworks in South Australia went into administration last year after reaching debts of more than $3 billion.
Speaking to ABC Radio, federal resources minister Matthew Canavan said the steel agreement was dependant on the Adani project going ahead.
“I certainly want to see the [Carmichael] project go ahead, and if it does go ahead now, the steel for the rail line will come from Australian steel works, protecting Australian jobs,” he said.
Canavan said he encouraged Adani to find ways of increasing local involvement in the Carmichael project.
“The steel for the rail line was a big component for their project and an obvious choice,” he said.
He also added that the Australian Government had strengthened its procurement guidelines to ensure more Australian steel is used on major projects.
Canavan also criticised Westpac’s decision not to fund the Adani project, claiming that is has “discriminated against North Queensland”.
“It’s not about Adani: it’s about opening up the Galilee Bain,” he said.
“it’s about utilising our resources as Australians to maximise the wealth we have in this country.
“Coal is our second-biggest export, it employs thousands of Australians, and I want to keep it that way.”
Adani recently applied for a loan from the Northern Australia Infrastructure Fund for the development of the railway line. This was criticised by rail network provider Aurizon which launched a competing loan bid to also develop a railway line.
At the time, Aurizon CEO Andrew Harding claimed its line would cost $1 billion less to build than Adani’s one.
“Aurizon’s proposal would significantly reduce the number of land acquisitions and have less impact on the natural environment and agricultural land,” he said.
Canavan will be in Whyalla for the steel announcement.