Australia faces a long road to re-establishing its domestic steel industry following the sudden closure of the Whyalla blast furnace.
However, state and federal leaders are confident the impending sale of the South Australian site will help bolster domestic steelmaking, and ultimately save the city itself.
On Monday, workers learned the blast furnace which has been offline since April would be permanently shut down, taking with it about 500 permanent jobs.
While defending the closure as unavoidable due to the state the furnace was in, state officials played down concerns over the broader implications for industry.
“The country needs us to be able to make steel,” SA Premier Peter Malinauskas told reporters.
“We’ve got to be able to do it for a whole range of sovereign capability purposes.”
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 Whyalla’s closure as a “brutal blow” for Australia’s sovereign capability.
“What we’ve seen is now the closure of 75 per cent of Australia’s capacity of structural steelmaking,” he told reporters in Canberra on Monday.
“It’s a future made overseas, not a future made in Australia.”
Negotiations are ongoing to find a new owner for the Whyalla site, with the final two bidders revealed to be Matt Latimore’s M Resources and India’s third-largest steelmaker Jindal Steel.
The sale is expected to be finalised by the end of 2026.
Bidders are primarily interested in accessing Whyalla’s rich local iron ore reserves, including magnetite, SA Treasurer and Energy Minister Tom Koutsantonis said.
However, doing so is subject to a “pit to port” indenture, meaning the sale of the site would be reliant on also having steelmaking capacity.
“We’ve got two bidders who are fighting very hard to get access to, most importantly, the mineral resources that are in the ground here,” he said.
“Ultimately to get hold of those resources, you need to operate a steelworks.
“One way or another, Whyalla is going to continue to make steel.”
Mr Malinauskas stressed the loss of the blast furnace would not affect the value of the site, saying it represented old technology which steelmaking companies no longer wanted.
“Nothing that occurs today disrupts or undermines our ability to deliver the long-term vision of Whyalla, which is to have a new steelmaker with new equipment and new technology,” he said.
“It’s not going to happen tomorrow, and it’s not going to happen in January or February.
“It’s going to take time because we’re talking about a minimum of a $1.9 billion recapitalisation investment to bring steelmaking to this country in a form that we haven’t seen before, and that’s going to be a journey.”
Australian Associated Press is the beating heart of Australian news. AAP is Australia’s only independent national newswire and has been delivering accurate, reliable and fast news content to the media industry, government and corporate sector for 85 years. We keep Australia informed.
