Hundreds of jobs to go at taxpayer-backed steelworks
Hundreds of workers at the collapsed Whyalla steelworks will lose their jobs after the site’s administrators abandoned efforts to restart its ageing blast furnace in the final stages of a protracted sale process for the site, with $1 billion in taxpayer support on offer for its new buyer.
The South Australian government announced on Monday that Whyalla’s coal-fired furnace, which melts iron ore to churn out molten metal, had been deemed beyond repair following years of under-investment by its previous owners, including British billionaire Sanjeev Gupta’s GFG Alliance.
The decision not to restart the furnace will effectively shut down most of the operations at the nation’s second-largest steelworks, cutting the jobs of up to 500 employees and 100 labour-hire contractors. About 1200 workers will remain in other sections of the site and its nearby port and iron ore mines. Staff at Whyalla were informed of the redundancies on Monday.
“This is a difficult day, but one which is inevitable,” said South Australian Premier Peter Malinauskas. “The blast furnace at Whyalla is 60 years old, and for many years has not had the investment it deserves through recent decades.”
The federal and state governments said they were “standing with workers”, and announced a joint $10 million support package to assist those affected by the job cuts.
The announcement comes after the steelworks, north of Adelaide, was pushed into administration in February 2025, with its former owner GFG Alliance owing tens of millions of dollars in unpaid debts and royalties. The state government appointed KordaMentha as administrators to manage the facility and oversee a sale process. Up to $1.9 billion in state and Commonwealth funding is on the table to upgrade the steelworks to a “modern, low-emission” facility if a new owner can be found.
The long-running sale process is now in its final stages, narrowing to two remaining contenders: Indian steel giant Jindal Steel, part of a multibillion-dollar industrial conglomerate, and M Resources, an Australian mining and investment firm led by coal billionaire Matt Latimore. The state government and KordaMentha anticipate the sale process to be completed by the end of the year.
Both of the short-listed bidders have drawn up proposals to replace Whyalla’s ageing blast furnace with modern steel-making processes, inducing with “direct reduced iron” technology, and an electric arc furnace to melt scrap metal into molten steel.
Another consortium led by Australia’s largest steelmaker, BlueScope, which includes Japan’s Nippon Steel, Korea’s POSCO and India’s JSW Steel, had long been considered the frontrunner to acquire Whyalla but was not named in the shortlist of preferred bidders. The consortium still holds a “right of last offer” to match any final bid lobbed by the two shortlisted companies, the state government has said.
Whyalla’s blast furnace, built by BHP in the 1960s, has suffered repeated outages in recent years, and has been offline since April.
Innes Willox, chief executive of the Australian Industry Group, said the closure of the blast furnace would have a devastating impact on Australia’s industrial capability, and the local economy.
“If the prospective buyer commits to purchasing a new furnace, it provides an opportunity to expand into less-carbon-intensive markets,” he said.
Federal Industry Minister Tim Ayres said the government’s focus was on supporting workers while creating the conditions for a new owner to invest in a “stronger, more sustainable future for Whyalla and Australian steel-making”.
“The Albanese and Malinauskas governments will continue to be there every step of the way,” Ayres said.
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