Here it is:The local chief of Posco says the South Korean steel...

Here it is:

The local chief of Posco says the South Korean steel giant has federal and South Australian government support for its $1.2 billion bid for ailing steelmaker Arrium, as he reiterated the company’s hunger for Australian assets.

Posco Australia managing director Soo-cheol Shin said political stability, well-established infrastructure and limited domestic consumption continued to make Australia an attractive investment target for the company, which is the single biggest buyer of Australian raw materials for steelmaking.

Arrium chairman Peter Smedley last month rejected a sweetened takeover offer from the Steelmakers Australia consortium that includes Posco and Hong Kong commodities trader Noble Group. But following meetings with federal ministers including Treasurer Wayne Swan and Resources Minister Martin Ferguson, and South Australian Premier Jay Weatherill, Mr Shin said he was confident of government support.

“All governments were in favour of us; we could feel the support from the government side,” Mr Shin told The Weekend Financial Review. “We are the single largest buyer of Australian commodities.

“They were valuing Posco’s existence in Australia. Australia has the value to be the source of our raw materials now and in the future.”

He acknowledged there was little overlap of Posco and Arrium but said the group valued the Australian steelmaker’s distribution business.

“They have an already established market, even though that market is not very large, but they have established markets and distribution centres within Australia,” he said.

“That’s also one benefit we can think about because establishing, setting up a sales market means a lot of severe competition these days.”

BlueScope Steel and Arrium are each other’s biggest clients in terms of steel distribution and some have raised concerns that Posco may use Arrium’s distribution channels to sell its own flat steel from South Korea, rather than BlueScope’s flat steel.

Mr Shin added Arrium’s mining consumables business, which makes crushing balls for mines, was a new area that interested Posco, labelling the division as “complementary”.

Posco’s Australian unit, known as POSA, also has a 12.5 per cent stake in Gina Rinehart’s Roy Hill project in Western Australia.

“That project is quite important for us because we are putting in a significant amount of money,” Mr Shin said. “It should be quite successful. But it is just beginning – it needs a lot of human power.”

Most of POSA’s investment in Roy Hill will be used for construction work in mining, rail and ports, with Posco’s engineering arm to get the construction contracts.

Mr Shin said Posco urgently wanted to secure reserves during the mining boom but the major mining companies would not engage with them “because they didn’t need us”.