South Australia will put up $50 million and has called on the next federal government to commit $100 million to help save Arrium's troubled Whyalla steelworks.
South Australian Premier Jay Weatherill has written to Prime Minister Malcolm Turnbull and Opposition Leader Bill Shorten seeking their support for a joint assistance package.
It's proposed the funding could only be accessed by a new owner of the company to support the Whyalla operations.
"The Arrium operations at Whyalla are critical to both South Australia and the nation as a whole," Mr Weatherill told parliament on Thursday.
"It is essential that we retain our sovereign steel-making capability."
Arrium was placed in administration in April after failed negotiations with its lenders amid sustained low commodity prices.
Administrators KordaMentha expect the company to attract genuine interest from a number of credible local and international groups with the restructuring and sale of the group to be finalised by the end of the year.
A South Australian steel taskforce has also been working with KordaMentha and the company on an assistance package to ensure the long-term viability of the Whyalla plant which employs about 1600 people.
Treasurer Tom Koutsantonis said the funding proposal provided flexibility for potential buyers and also ensured the money stayed in Whyalla.
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