Hundreds of job losses announced at Whyalla steelworks

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.

Administrators KordaMentha have confirmed the loss of 500 jobs, reducing the workforce from 1,700 to 1,200. Another 100 labour hire workers will also lose their jobs.

The future is also unclear for another 200 "embedded contractors" employed by external companies to work at the steelworks and its associated mines and port — but the ABC understands they could be redeployed elsewhere.

Look back at how ABC readers and other Australians responded to this live moment.

That's it for the Whyalla steelworks announcement, so we'll wrap up our live coverage here.

You can catch up on the developments here as they happen or download the ABC News app for the latest updates.

AWU representative Shane Karger says it was "not a great day" and there would be "some hard roads ahead" for workers.

"It's going to be tough for a little while to come, but I hear the word resilience used about our workers. I just like to call them stubbornly determined.

He says knowing workers made redundant would receive their full entitlements is a "massive relief".

He says there is a "broad spectrum" of emotions among workers about closing the blast furnace, with some people having worked there for more than 30 years.

"There's some that look at it and go 'about time'.

"There's others that will look at it and go, 'I can do it. Give me another chance. I'll get it going'."

Mr Malinauskas says the redundancies are expected to cost the state and federal governments $60 million to $80 million.

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.

It comes as administrators KordaMentha and the state and federal governments look to finalise the sale of the business, which went into administration 19 months ago.

At the time the administration was announced in February 2025, South Australian Premier Peter Malinauskas said the purpose of appointing KordaMentha was to "stabilise the business and seek to stop" job losses from occurring.

"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."

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".

But he further added that "people working at the steelworks today will be working there tomorrow and into the foreseeable future".

Since the cautious optimism of early 2025, the forecasts around the future of Whyalla had started to shift, with both the premier and the administrators speaking openly about potential redundancies.

"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 by ABC News 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."

In July, three steelworks employees were treated for injuries suffered during attempts to restart the site's troubled furnace — a situation alluded to in the letter to staff.

"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.

Whyalla resident Michael Miller said the steelworks had been integral to the town for decades.

"That [the steelworks] is the town and it always has been, it's been the steelworks ever since I grew up here — I'm 60, my father worked there four years," he said.

"It's pretty bad, I don't know what's going to happen to the place.

"They spent a lot of money over there, seems to be for nothing."

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

On Sunday, Mr Malinauskas said a sale was still likely in the next three and a half months.

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

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

The SA government wrested control of the steelworks from Sanjeev Gupta's GFG Alliance in early 2025, in an extraordinary series of measures including urgent changes to the Whyalla Steel Works Act, which were rushed through both houses of state parliament.

GFG was in crisis after failing to pay tens of millions of dollars in royalty payments to the government, and millions in unpaid bills to creditors.

The current situation is the latest in a long line of moments of turmoil in the history of the steelmaking city.

In 2016 another previous owner, Arrium, went into voluntary administration after reporting a half-year loss of $236 million, including a $43 million loss for the Whyalla steelworks due to falling steel prices in Asia.