Jobs gone as smelter blast furnace snuffed out for good

Hundreds of workers will be laid off following a decision to permanently shut down a troubled steelworks' blast furnace.

The Whyalla steelworks' blast furnace has been offline since April, with workers at the South Australian site told on Monday morning it won't be restarted.

The furnace, commissioned in the 1960s and used to melt iron ore for making steel, has had repeated shutdowns in recent years and undergone unscheduled maintenance.

"At the end of the day, the blast furnace made the decision itself," said Sebastian Hams of the steelworks' administrator KordaMentha.

"We've got to the point where it's simply unsustainable to continue the blast furnace recovery and the failure of the blast furnace is inevitable."

South Australian Premier Peter Malinauskas announced a $10.2 million support package, jointly funded by state and federal governments, for workers being made redundant.

Redundancies are expected to be voluntary and forced but all workers will have their entitlements paid out in full.

"At some point or another, the blast furnace's life was coming to an end," Mr Malinauskas said.

"It's a little bit sooner than what we otherwise would have appreciated."

Whyalla is one of only two Australian primary steelworks and the only local manufacturer of long products, including hot rolled structural steel sections and rail.

Federal opposition industry spokesman Andrew Hastie described it as a "brutal blow" for workers, the local community and sovereign capability.

"What we've seen is now the closure of 75 per cent of Australia's capacity of structural steel making," he told reporters in Canberra.

The South Australian government forced the steelworks into administration in February 2025 over the mounting debts of former owner GFG Alliance, headed by Indian-born British businessman Sanjeev Gupta.

A joint state-federal $2.4 billion rescue package was handed out to keep the steelworks afloat under KordaMentha.