The firm of administrators charged with selling the Whyalla Steelworks plant in South Australia announced on September 14 that efforts to repair the plant’s blast furnace had been abandoned. Smelting of iron ore would cease and of the plant’s total of close to 1700 regular workers, some 500 would lose their jobs.

Joining them would be about 100 “labour hire” workers and many of the 200 “embedded contractors” working at the plant but employed by other companies.

It is hard to overstate the impact of the sackings on Whyalla and its 21,000 people. It is thought that about five further local jobs are to be created from the spending of each full-time steelworks employee. A huge chunk of money will thus be gouged out of the city’s narrowly-based economy. Small businesses will shut their doors, and property values will crash.

One of many ironies is that demand for the steel plant’s main products remains strong.

Whyalla, in recent years, has produced about three-quarters of Australia’s structural steel and all of the country’s output of “long products” such as steel rails and girders. Production of these goods will continue, with the plant’s rolling mill processing imports of semi-finished steel “blooms”. Also carrying on will be production — now for shipment elsewhere — of smelter-ready iron ore pellets, on the basis of the ore resources of the nearby Middleback Range.

But the integrated nature of Whyalla’s steel industry, from ore mining through smelting and processing to shipping through the city’s port, has ended. It was this integration that, for many years, allowed the plant to survive despite inept management and gross under-investment.

Currently, South Australian government-appointed administrators project a sale by the end of the year to one of two final bidders — Indian corporation Jindal Steel or Brisbane-based metallurgical coal firm M Resources.

Private interests, however, have an unimpressive record of........

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