Whyalla Steelworks to Cut 500 Jobs as Blast Furnace Closes
Synopsis
Whyalla steelworks will cut around 500 jobs after its blast furnace is permanently shut down, while another 100 labour hire workers are expected to lose their jobs.
Key Highlights
- Nearly 500 direct jobs are being laid off at Whyalla steelworks after the permanent closure of blast furnaces.
- 100 more labour hire jobs are set to be axed.
- The headcount will decrease to around 1,200 workers from 1,700.
- A $10.2 million support package for workers affected by the closure has been announced by the South Australian and federal governments.
Hundreds of workers at the Whyalla steelworks in South Australia are set to lose their jobs after administrators confirmed that the site’s blast furnace will be permanently shut down.
Administrators KordaMentha told workers about the decision on Monday. Around 500 direct jobs will be lost, while another 100 labour hire workers are also expected to be affected.
The announcement is a critical blow for Whyalla, the South Australian city that has supported the steelworks for many decades.
Blast furnace to be shut down on a permanent basis
The blast furnace has been offline since April, when efforts to revive it were unsuccessful. The furnace was then used to melt iron ore which became liquid pig iron and turned into steel.
The workers made multiple attempts to resume furnace operations, but problems with turnover persisted. In July, three workers at the steelworks were injured trying to restart the furnace.
KordaMentha has decided now that any more attempts are out of the question. Steel production will not restart until new steelmaking equipment based on modern technology is constructed at the site.
500 Jobs to Go at Steelworks
The steelworks has 1,700 staff and this restructuring will bring that down to approximately 1,200 people. The cuts will impact workers in various parts of the business as the site adapts to a new operational model.
About 100 contract workers are also likely to lose their jobs. In effect, this means that the steelworks will be moving to new methods of producing steel over several years.
The redundancies are expected to cost $60 million to $80 million, according to the state and federal governments. Workers were offered training, financial advice and assistance with mental health.
$10.2 Million Support Package Announced
Both state and federal governments have announced a $10.2 million support package for workers impacted by the job losses.
The help is designed to support employees in managing the immediate effects of the layoffs and getting them ready for new job opportunities. There are services such as training to help people leaving the steelworks.
The package arrives at a time when the future of Whyalla hangs in the balance. The steelworks has long been a major city employer, meaning the layoffs risk also hitting local businesses that depend on spending from workers and their families.
Still On Track For Sale Of Steelworks
The job cuts follow continued efforts by its administrators and the South Australian government to find an owner for the steelworks. The sale should shape the investment and operations at the site in the years to come.
The bid for the business is still open to bids including those by Jindal Steel and M Resources. BlueScope Steel reserves the right to make a final bid.
The government remains on track to sell the transaction by late 2026, Premier Peter Malinauskas said. He has argued a new owner could attract massive investment in Whyalla and create a sustainable future for the steelworks.
The Whyalla steelworks are vital to both the local economy and Australia’s steel supply. The site manufactures long steel products primarily for construction and infrastructure-related end uses.
In that case, the blast furnace shutdown indicates traditional steelmaking will not continue in its existing form at the site. The next phase will be in the hands of a new owner and its ambitions to develop green steelmaking technology.
The transition may ultimately give the plant a new destiny, but uncertainty remains while teams solidify sale and redevelopment plans.
What It Means for Entrepreneurs
The job cuts may impact smaller businesses in Whyalla that rely on the steelworks and its employees. Companies that operate transport, maintenance, meal and lodging services may experience less demand if the activity in the area of the plant decreases.
The planned redevelopment of the towns could just as easily lead to new incentives. Construction, engineering, equipment supply, training and other support services could be available in a massive investment harvest from entrepreneurs if the new owner were to invest heavily into the site. Your answer will also depend on the final buyer and what they plan to do with Whyalla.
Source: abc net
At Inspirepreneurs Magazine, covering entrepreneurship, business failures, and the human stories behind the world's most ambitious founders. She writes at the intersection of strategy and storytelling.
