South Australia’s Whyalla steelworks is to permanently shut its blast furnace, putting up to 500 jobs at risk after administrators and the state government concluded that keeping it operating was no longer feasible.
The closure will reduce the steelworks’ workforce from about 1,700 to 1,200. Some employees are expected to accept voluntary redundancies, while others may be made redundant, at an estimated cost to taxpayers of between 60 million and 80 million Australian dollars.
South Australian Premier Peter Malinauskas said the decision had come sooner than he would have wanted, but described the furnace as an ageing facility that had not been properly maintained.
“It is an old, clapped out blast furnace that has not been well cared for or looked after, particularly by the previous owner,” he said.
Mr Malinauskas added: “This thing – for all intents and purposes – should not be operating. It’s only been able to survive because there are so many dedicated men and women who have kept it alive… these are good people that have worked incredibly hard.”
Whyalla steelworks workers to receive support
The state government is introducing a 10.2 million Australian dollar support package, jointly funded with the federal government. It will provide counselling, reskilling and re-accreditation for affected employees, as well as assistance for contractors.
In an email to steelworks suppliers, a senior Whyalla executive said management had decided it was “no longer appropriate to place our people at risk in pursuit of a recovery that is no longer feasible”.
The email said labour-hire workers in the directly affected areas would no longer be needed, with a “significant reduction” in labour-hire and contractor opportunities also expected elsewhere at the site.
The furnace has been offline since April after workers were unable to restart it. Built in the 1960s, it has not undergone a substantial upgrade since 2004 and was used to turn iron ore into liquid pig iron for steelmaking.
Administrators KordaMentha took control of the plant in February 2025 after the state government wrestled control from GFG Alliance. The owners had failed to pay tens of millions of dollars in royalties, and state and federal governments have since committed more than one billion Australian dollars to keep the facility operating.
Jindal Steel and M Resources remain in contention to buy the Whyalla steelworks, with the Premier saying a decision is expected before Christmas.
