The South Australian and federal governments have announced a joint $10 million support package for hundreds of Whyalla workers who have lost their jobs as the steelworks’ blast furnace was permanently switched off on Monday.

It follows a $2.4 billion city-saving package announced by the governments in February last year, with money set aside for the administrators and to pay back creditors of OneSteel.

Money was also earmarked for future upgrades of the Whyalla steelworks.

“It’s a sad day… we’ll have some tough times, hopefully a little bit less, but the long-term future I certainly believe in,” Whyalla Mayor Phill Stone said, adding that locals had expected the closure because the blast furnace had shutdown since April.

Australian Workers’ Union Whyalla and Eyre Peninsula branch organiser Shane Karger said “we’re not going to give up”. He said it was day one of looking to a new future for Whyalla when a “bona fide” new owner was secured for the plant.

“It’s a massive relief for the Premier [Peter Malinauskas] to come forward with full redundancy packages,” Karger said.

Malinauskas said Monday’s decision was “difficult” but “inevitable”.

The steelworks’ 60-year-old blast furnace was described as “beyond repair” in a joint state and federal government statement. It was commissioned in 1965 and is a key component in making steel – but has been patched for years to keep it running.

Administrator KordaMentha recommended the permanent switch-off, meaning any new steelworks buyer will have to find an alternative method to produce steel at the regional factory.

In the meantime, steel “blooms” – semi-finished blocks of steel ready for the steel rolling mill – will be sent to Whyalla so the factory can continue making steel products.

About 500 employees and a further 100 labour hire workers are directly affected by the closure.

While the blast furnace will cease operations, mining, port and other activities at the site will continue.

The sale process for the steelworks also continues, supported by $1 billion in state government funding for wages and general operation.

Malinauskas said he was working with major local employers – such as BHP and Hallett Group – to help find alternative work for the redundant staff.

“The blast furnace at Whyalla is 60 years old and for many years has not had the investment it deserves through recent decades,” he said.

“It is only due to the Herculean efforts of the workers in Whyalla that it has survived this long

“The future for Whyalla rests in new equipment, new capital, which is what we are achieving through the sale process.”

KordaMentha was meant to announce a preferred bidder by the end of September for the business that it took over running in February 2025, a business that will require billions of dollars in investment to get it operating again. Malinauskas said a “decision on who will operate the steelworks in the future will still be made before Christmas”.

Either Indian steel giant Jindal Steel International or Australian-owned M Resources will be named as a preferred buyer.

But Australian steel business BlueScope – the company that has advised KordaMentha on the steelworks’ current operations – has the first right of refusal for any deal, keeping it firmly in the running to purchase the ailing asset.

Support package unveiled

The joint $10 million package – split 50/50 between the SA and federal governments – announced on Monday was designed to include assistance for workers, families and communities affected by the closure of the blast furnace.

A “Whyalla Structural Adjustment Package” will help people move into new employment, build new skills and connect with other local employers.

Employment Relations Minister Amanda Rishworth said the federal government’s focus was on “ensuring workers have the support they need and no one is left to navigate this alone”.

Republished from InDaily