Whyalla Steelworks Blast Furnace to Shut Down Permanently, Hundreds of Jobs Lost

Hundreds of workers in Whyalla will lose their jobs as a result of a decision to permanently shut down the blast furnace at the South Australian regional city's steelworks.

It is expected the decision will mean 500 workers will be out of a job, as well as more than 100 contractors working at the site. Workers at the Whyalla steelworks were informed about the decision this morning.

The blast furnace has been offline since April and, despite the best efforts of workers, they have not been able to restart it. The coal-fired oven was used to melt iron ore into liquid pig iron, which was then turned into steel.

South Australian Premier Peter Malinauskas is expected to reveal further details about the decision this afternoon, including potential job offers from other employers, such as BHP.

"For workers employed by OneSteel Manufacturing, that is workers at the steelworks itself, they will now have their futures assured," the premier said at the time.

"They're in a situation now where they're not going to wake up tomorrow and the administrator is making people redundant."

"people working at the steelworks today will be working there tomorrow and into the foreseeable future".

But Mr Malinauskas qualified those comments by adding that there would be "a process that the administrator goes through and the new owners potentially will make their own decisions".

"If it comes to pass that there is a requirement for redundancies or whatever that looks like, you can rest assured that we'll comply with our enterprise agreements, we'll work with the unions, we'll work with the state to manage that as best we can," KordaMentha partner Sebastian Hams said in May.

Talk of sizeable job losses had been brewing in recent days ahead of the premier's arrival in the regional city on Monday morning. Mr Hams addressed workers in the presence of the premier, Treasurer Tom Koutsantonis and local MP Eddie Hughes.

"We won't be able to accommodate everyone," Mr Hams said.

"Our first option is redeployment, our second option is voluntary redundancy and then the third option is essentially forced redundancy."

A letter distributed to workers and sighted confirmed the bleak prognosis, stating that steelmaking would "cease" until "new steelworks assets are constructed using modern steelmaking technologies".

"We have reviewed our operating model and level resourcing required across the entire OneSteel business," the letter stated.

"As a result of the closure and restructuring, some parts of the business will no longer exist, while others will have reduced employee numbers. There will be significantly fewer jobs available across the business. At this stage, we are anticipating potential impacts to approximately 500 employees and 100 labour hire workers."

"It is no longer appropriate to place our people at risk in pursuit of a recovery that is no longer feasible," it stated.

"We have therefore decided to cease attempts to restart the blast furnace."

Documents offering advice to workers who are set to lose their jobs are being circulated among the workforce, including training and financial advice and mental health support.

According to the letter circulated to workers, a forum will be held in Whyalla this afternoon to allow contractors to ask questions about the situation.

Two bidders, Jindal Steel and M Resources, remain in the running to buy the steelworks, but BlueScope Steel retains its right of last offer.

"We intend to finalise the sale and the transaction by the end of this year. We're on track to do that," Mr Malinauskas said.

"What that will set up is a massive injection of capital into Whyalla to set it up for a new long-term future."