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.
About 500 workers are expected to lose their jobs.
"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.
"It's a future made overseas, not a future made in Australia."
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.
KordaMentha and the state government have been working to sell the business, with coal magnate Matt Latimore's M Resources and India's third-largest steelmaker Jindal Steel revealed as the final remaining bidders in May.
A consortium led by BlueScope Steel, which has been advising KordaMentha since March 2025, retains the right of final offer.
The sale is expected to be finalised by the end of 2026, Mr Malinauskas said.
The Albanese government has been under pressure from the minerals processing industry to prop up loss-making facilities or risk further eroding Australia's industrial workforce.
Rescue packages have also been doled out to Nyrstar's lead smelters in South Australia and Tasmania and the nation's largest aluminium smelter at Tomago in NSW's Hunter region.
