Around 600 workers at South Australia’s Whyalla Steelworks are set to lose their jobs after administrator KordaMentha confirmed the permanent closure of the site’s 60-year-old blast furnace.
The decision will reduce the steelworks’ workforce from about 1,700 to 1,200 permanent employees, with a further 100 labour-hire roles also affected, according to Australian media reports.
The future of another 200 embedded contractors working across the steelworks, mines and port remains uncertain. The blast furnace has been offline since April, with repeated attempts to restart it ultimately abandoned.
Redundancies follow failed restart
KordaMentha said it was no longer feasible to continue efforts to restart the ageing furnace, which has faced significant operational and maintenance challenges.
The administrator told workers that “It is no longer appropriate to place our people at risk in pursuit of a recovery that is no longer feasible,” before confirming that attempts to restart the blast furnace would cease.
The closure is expected to cost between A$60 million and A$80 million in redundancies, according to South Australian Premier Peter Malinauskas.
The associated pellet plant will also close. The rolling mill, however, is expected to continue operating using imported semi-finished steel, while mining and port operations will continue, with iron ore being exported.
Impact on Whyalla workforce
The steelworks is a major employer in Whyalla, a regional city of about 22,000 people. The scale of the cuts is expected to extend beyond employees directly affected by the redundancies, with uncertainty also surrounding contractors working across the wider operation.
The potential number of affected workers could reach about 800 if embedded contractors are ultimately impacted.
The Australian Workers Union acknowledged the impact on its members while maintaining that the closure forms part of the steelworks’ longer-term transition.
“It is a hard day for our members, but it’s also day one of a new future in Whyalla.”
The union added, “The state government has always been clear that closure of the blast furnace would happen, and this does not undermine the long-term vision of the Whyalla steelworks as a green steel powerhouse.”
Jobs transition
The federal and South Australian governments have announced a A$10.2 million support package for affected workers, including assistance with retraining and finding new employment.
The state government has said the steelworks sale remains on track to be completed by the end of 2026. Two bidders, India’s Jindal Steel and Australian company M Resources, remain in contention, while BlueScope Steel retains a right of final offer.
Both prospective buyers are understood to be considering replacing the ageing blast furnace with newer steelmaking technology, including an electric arc furnace.
However, the transition is expected to create a gap before new steelmaking capacity can come online. Estimates for the return of steelmaking range from two to four years.
A new workforce model
The closure marks a significant shift in the workforce requirements of the Whyalla operation. While the rolling mill and other parts of the business will continue, the end of blast-furnace operations removes a substantial number of roles associated with traditional steelmaking.
South Australian Treasurer Tom Koutsantonis said, “There was always going to be a gap, there was always going to be a time when the blast furnace closed — between then and the new construction of the new facilities — because both bidders weren't going to keep underwriting the loss the blast furnace was making.”
For workers, the immediate challenge is navigating the redundancies and employment transition while the steelworks awaits new ownership and investment. For Whyalla, the longer-term question is how many of the jobs lost during the transition will return when new steelmaking facilities are established.