Mike Smithson: South Australia’s Whyalla steelworks under further siege with more job cuts announced

South Australia’s steel city is under further siege today with another massive round of job losses just announced.

News of up to 350 mining job cuts, linked to the Whyalla steelworks, has sent yet another shudder through the Upper Spencer Gulf.

Golding mining workers have been literally sitting idle at Iron Knob and Iron Baron as the nervous city waited for the giant blast furnace to be producing again after four months of repair and non-production.

It was always wishful thinking to assume worker payments would continue with nothing to show for it.

The company has now brought forward a ramp-down of hematite mining from the nearby Middle Back Ranges.

The two mines are crucial to the existence of Whyalla 20,000 population, including the 1,000 steelmakers.

They supply hematite and magnetite iron ore which is then railed and piped to Whyalla.

Most of that product is pelletised and used in steel making.

The remainder is a valuable export product mainly to Asia.

No prizes for guessing the domino effect from hundreds of jobs going over the coming months.

There is already a steady exodus of residents from Whyalla fearing the worst.

GFG Alliance, which owns the steelworks and both mining operations, has millions of dollars in outstanding bills to contractors.

Many large suppliers have already given up and walked away.

Six months ago, a few dozen houses were on the market in the city.

That’s now turned into hundreds of homes being offloaded.

One concerned local told me last night that displaced workers are now struggling to pay hefty mortgages and are left in severe negative equity as house prices tumble.

At a state level, GFG owes plenty in state royalties.

The SA government refuses to say how much, but one economic forecast estimates over the past three years that total may be approaching half a billion dollars.

But the exact amount remains unverified.

Whyalla’s mayor Phill Stone told the national broadcaster this morning that he was only briefed with the grim news late yesterday, despite having had face-to-face meetings with GFG global chief Sanjeev Gupta last week.

“We’ve just breathed a sigh of relief that the blast furnace was up and running and the mill was coming good, and we were going to produce steel,” he said.

“I guess this adds another straw to the load that we’ve still got issues.

“There are going to be jobs that are going to be affected.

“And I guess it will have a little bit of a whammy on our morale, how we are feeling.”

Mr Stone says only 30 per cent of lost jobs involve Whyalla-based residents with the others coming from nearby towns and cities.

The SA government is yet to respond to this latest development.