Up to 600 workers are expected to lose their jobs at South Australia's Whyalla steelworks following a decision to permanently shut down the site's blast furnace on Monday. Administrators KordaMentha, who were appointed to run the plant in February 2025, made the decision alongside the state government.
The closure is expected to reduce the Whyalla workforce from 1,700 to 1,200 employees. The decision comes after the previous owners failed to pay tens of millions of dollars in royalty payments to the government, leading to the state government taking control of the facility. Since then, state and federal governments have collectively invested over $1 billion to maintain the plant's operations.
South Australian Premier Peter Malinauskas stated that the closure of the blast furnace occurred sooner than anticipated. He described the furnace as an "old, clapped out blast furnace that has not been well cared for or looked after, particularly by the previous owner." The furnace has been offline since April and has not been restarted.
In an email to steelworks suppliers, a senior Whyalla executive indicated that the blast furnace's management determined it was "no longer appropriate to place our people at risk in pursuit of a recovery that is no longer feasible." The email also noted an expected significant reduction in labor hire and contractor opportunities across other areas of the steelworks beyond those directly impacted.
This development marks a shift from earlier statements made by Malinauskas in February 2025, when he announced the plant's administration was intended to "stabilise the business and seek to stop" future job losses, assuring workers at the steelworks that their futures were secured.
The blast furnace, originally built in the 1960s and last substantially upgraded in 2004, was used to melt iron ore into liquid pig iron for steel production. Currently, two potential buyers, Jindal Steel and M Resources, remain in contention to acquire the steelworks.