Adani to buy steel from Arrium in Whyalla

India conglomerate Adani will source steel for works around its Queensland mine from Arrium Steel. (AAP)

Indian conglomerate Adani will source steel for works around its controversial Queensland mine from struggling Arrium Steel in Whyalla.

The struggling South Australian steel industry has been given a lifeline with a deal to supply more than $70 million worth of steel for the controversial Adani coal mine project in Queensland.

But that's before the project has officially won the go-ahead.

Asked if he was putting the cart before the horse, Acting Prime Minister Barnaby Joyce told reporters in Whyalla on Thursday: "We are doing everything in our power at a federal level to drive ahead and make sure that the Adani mine starts".

"We're not down here because we've got nothing to do," he said.

The giant Indian conglomerate put pen to paper on a memorandum of understanding giving Arrium Steel sole right to supply the steel required for the 400km rail line between the central Queensland mine site and the port at Abbot Point.

"This is a landmark deal for the Galilee projects," the company's Australian CEO Jeyakumar Janakaraj said.

"Though it would have clearly been cheaper to source the rail from overseas, Adani values supporting Australian businesses and Australian jobs."

Mr Joyce urged Labor leader Bill Shorten and Queensland Premier Annastacia Palaszczuk to support the project.

"Make this work, get on-side, stand up for real working men and women," he said alongside Resources Minister Matt Canavan.

He spelled out the economic chain, saying for Indians to have power they need coal and for the mine, and to transport the coal they need a rail line. By using Arrium steel it means Australians have a job.

Both Mr Joyce and Mr Canavan denied they were putting extra pressure on the Northern Australia Infrastructure Facility to back a loan for the rail line.

Arrium Steel has been facing closure, with crippling debt and a lack of orders, which threatened the survival of the Whyalla plant.

Greens Senator Sarah Hanson-Young slammed the government for spruiking what she described as a cruel deal to Whyalla steelworkers, that won't result in long-term sustainability for Arrium.

"To say a one-off order of 56,000 tonnes of railway line would save the Whyalla steelworks is nothing more than a cruel trick to a community doing it tough," she said.

But Mr Joyce claimed Senator Hanson-Young was not in a place to start telling steelworkers in Whyalla and coal workers in Central Queensland that they don't have rights to social advancement.

Greens leader Richard Di Natale said the effect of the deal on the Whyalla area would actually be minimal and amounted to "crumbs".

"Let's do the maths here, we're talking about a billion dollar taxpayer subsidy to throw a few crumbs to South Australia," Senator Di Natale said in Brisbane.

"If they were serious about local jobs we've got a whole lot of rail projects that need to be built, we should build them with Australian steel."

Source AAP

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