According the company, the steel works posted an AU$43 million operating loss during the first half due to lower Asian steel prices and its fixed-cost iron feed. Those factors more than offset AU$100 million in cost reductions announced last year.

The company said that even with those reductions, the South Australia facility can't run profitably, given current steel prices in Asia, and therefore needs another AU$60 million in savings just to break even. 

Arrium is Australia's only long products producer, and the Whyalla combi-caster feeds the company's structural and rail mill. Whyalla makes approximately 1.2 million metric tons of raw steel annually, accounting for about half of the company's output.

South Australian Premier Jay Weatherill said he has had talks with Australian Prime Minister Malcolm Turnbull about the plant. He said he expects that the federal government will work with South Australia on offering support to the steelmaker, according to The Guardian newspaper. 

“We want to make sure that any support that we give to Arrium is support which provides a long-term sustainable future for that business,” Weatherill said.

South Australia Treasurer Tom Koutsantonis told The Australian newspaper that preserving the country's steel industry is as important as securing its borders.

“It is an issue of the sovereignty of our nation that we’re able to produce structural steel in this country. Whyalla is the only place that does this anywhere in the nation. It’s as important to the nation ... as protecting our borders.”