Arrium sells Newcastle manufacturing business

Arrium is selling its Wire Ropes business in Newcastle to a Danish firm for $90 million.

The business supplies drag line and shovel ropes to miners and has been operating for more than 90 years.

Arrium’s CEO Andrew Roberts said while Wire Ropes is a quality outfit, it lies outside the company’s strategic focus for future growth in mining consumables.

"Our growth in mining consumables is centred on the global mineral processing industry, including capturing at least our share of the expected strong growth in grinding media demand," Roberts said.

"Today's announcement is consistent with our focus on recuding debt, and builds on our good progress with asset divestments."

Arrium’s asset divestment proceeds for FY2015 will increase to at least $150 million following the completion of the sale in March.

New owner Bekeart is expected to offer all of Wire Rope’s 100 workers ongoing employment.

Last month, Arrium announced it will be recording an asset impairment charge of $1.3 billion.

The writedown relates to Arrium’s iron ore mining and steel businesses and includes an impairment of $1.7 billion in the company primarily related to the impact of low iron ore prices and the mothballing of Southern Iron mine, and $130 million in steel and recycling.

The company is targeting a $200 million reduction in its capital expenditure as well as a redesign of its mining business in order to deal with the mining downturn. 

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