Iron ore miner and steel company Arrium has slammed the federal government for failing to crack down on the dumping of cheap foreign steel imports.
The criticism came as the company formerly named OneSteel reported a $1.5 billion half year loss, largely due to plunging iron ore prices and $1.34 billion in impairments from the closure of a South Australian mine.
Arrium’s mining division posted a $65 million loss, and there are no signs of a price recovery, while losses in the steel making business widened to $35 million.
Chief executive Andrew Roberts said the Anti-Dumping Commission’s investigations into steel bar imports were moving at an unacceptably slow rate.
Arrium and BlueScope Steel have long complained of being undercut on prices for construction steel reinforcing bar by overseas producers.
Dumping is not illegal but a government can act to protect local industry, such as in Canada where import duties were recently imposed.
“It is very disappointing, we are continuing to suffer injury in steel from dumped import goods,” Mr Roberts said.
“While we’ve seen encouraging signs and comment from the government recently related to initiatives to improve our anti-dumping regime, we are yet to see this reflected into actions and outcomes.”
Mr Roberts is optimistic Arrium will achieve stronger earnings in the second half of the financial year, including improvement in its mining equipment business and a better performance from the steel division.
He said the company was well placed for an expected lift in construction activity, particularly the use of intensive steel in high rise apartments.
Arrium shut the higher priced of its two South Australian iron ore projects in January – cutting 580 jobs.
It is targetting a 27 per cent fall in production costs to about $57 a tonne by 2015/16, meaning a return to profitability, Mr Roberts said.
IG market strategist Evan Lucas said Arrium’s $22 million underlying loss, which excludes impairments, was a horrible result.
He questioned the company’s optimism about the second half and said shareholders were unlikely to be paid a dividend for some time.
Arrium shares finished the session steady at 22 cents. They have fallen 85 per cent in the last year.
ARRIUM STRUGGLES IN WEAK STEEL AND IRON ORE MARKET
* Net loss of $1.5b, down from $220m net profit in 2013/14
* Revenue of $3.22b, down 12 pct from $3.6b
* No interim dividend, down from six cents