'One last crack' to restart Whyalla’s blast furnace as workers face nervous wait

Hundreds of jobs at the Whyalla steelworks are at risk ahead of an anticipated permanent closure of the plant's blast furnace.

But there's optimism that can be delayed for now, with workers preparing "one last crack" to restart the furnace within the next fortnight.

The iron-producing furnace has been offline since April. It was built in the 1960s and has not been substantially upgraded since 2004.

The state government, unions and steelworks administrator KordaMentha are all preparing for a scenario where the furnace permanently shuts before the steelworks transitions to a direct-reduced iron plant (DRI) and electric arc furnace (EAF).

Sam Crafter, who leads the state government's Whyalla steelworks Industrial Transformation Unit, appeared before parliament's budget and finance committee on Monday.

"Obviously, the blast furnace is a very old piece of equipment and so it's not likely that the blast furnace will be able to make that transition," Mr Crafter said.

The ABC understands a permanent furnace closure could lead to hundreds of job losses.

Mr Crafter told the committee the Department of State Development was preparing "workplace support and development packages" for workers and contractors in Whyalla.

Premier Peter Malinauskas said while it was up to the steelworks to prepare redundancy packages, government agencies were preparing to support workers to transfer to "other opportunities".

"At some point in time the blast furnace's life must necessarily come to an end," he said.

"When that happens, there'll be less demand for labour in the immediate term, particularly for those people who work in and around the blast furnace.

"Many of those workers under those circumstances would be entitled to a redundancy package, but others might want to transfer to other opportunities."

Mr Malinauskas said the timeline for restarting the furnace "constantly changes" as the machinery undergoes significant maintenance.

"That work is happening in situ in and around the blast furnace, and that informs the timing of when we're going to give it one last crack to bring it back up and running," he said.

Administrator KordaMentha said the furnace would be back online in early July.

The state and federal governments have made $1.9 billion available for a new owner to transition the steelworks to green steelmaking, after the state government stripped the facility from British industrialist Sanjeev Gupta's GFG Alliance in February 2025.

Australian-owned M Resources and Indian company Jindal Steel are the last two bidders in the running, with KordaMentha anticipating a sale by the end of September.

Mr Malinauskas said both prospective buyers were committed to transitioning the steelworks to a DRI and EAF operation, but on different timelines.

Australian Workers Union SA branch secretary Gary Henderson said there was hope the furnace would restart "in the next week or so".

"It's just time for a new furnace — it would have been nice to have one four or five years ago but that didn't happen with the previous owner," he said.

"When you've got equipment that old it's like a car or any machinery, you keep patching it up and keep patching it up, but it's definitely at the end of its shelf life."

The blast furnace faced similar shutdowns under the stewardship of GFG Alliance.

Mr Henderson agreed that there was a "real risk" the furnace would not make it to the transition of a new furnace.

"The risk is that there could be potential where people have to use their annual leave, there could be a risk of a reduction of hours of work which we saw before," he said.

"A worst-case scenario would be redundancies."