THE Government today rushed to provide a $100 million advance to BlueScope Steel as it sacked workers and began the shutdown of Australia's steel export industry.

Shares in the steel maker plunged almost 10 per cent to their lowest ever after the company reported a more than $1 billion loss.



The retrenchment of 1000 steel workers in Pt Kembla in NSW and on Victoria's Mornington Peninsular was confirmed by BlueScope this morning.



It is one of the biggest hits ever to Australian manufacturing and means we could be the industrialised nation with the most coal and iron ore, but the only one without a steel industry.



"We are experiencing significant economic challenges and structural change in the global steel industry,'' BlueScope chairman Graham Kraehe said in a statement today.



BlueScope said the proposed carbon pricing scheme was not a factor in its decision, but the Opposition is expected to argue that prospects for the industry were made worse by the Government's scheme.



National secretary of the Australian Workers' Union, Paul Howes, today blamed stingy Australian mining giants and the high value of the Australian dollar for the closures.



"This announcement is principally because of the dollar,'' said Mr Howes.



"It's not going to improve in the short term unless we have substantial changes regarding the way that we promote domestic consumption.''



"There is very little the Australian government can do to control the dollar,'' he said, repeating a call for the Chinese Government to float its currency, which would increase its value and lower that of Australia's.



That would make Chinese exports less affordable and Australia products more competitive. The union wants mining companies to buy more Australian steel.



"It would be good to have the Australian government put some pressure on the Chinese government to finally put a real value on the yuan, because the depreciation of that currency by up to 40 per cent is a significant factor in why our Australian dollar is so high,'' said Mr Howes.



The Government today accelerated and added to its Steel Transformation Plan to allow BlueScope to get $100 million now that it had been scheduled to receive next July.



It will be up to BlueScope to activate the advance facility. The steel industry had been entitled to $300 million over five years from 2012-13.



More cash could be available after the company made "a number of commitments to the Government in relation to its restructure''.



It has agreed that its shutdown of the Port Kembla blast furnace No. 6 and metal coating line No. 5 at Western Port would not be total and could be reversed if the market improved.



Sacked workers would be paid all their legal entitlements in accordance with applicable workplace relations legislation, modern awards and the National Employment Standards.



BlueScope had agreed to be a significant employer in the Illawarra area, said Prime Minister Gillard in a statement.



The Government also wants to increases assistance to the 1000 workers in Wollongong and the Mornington peninsular who will be made redundant.



A $30 million innovation fund will be launched to support new businesses and high-skilled jobs in the areas.



Jobs Services Australia will get an extra $10 million to train the sacked workers and find them other jobs.



The head of the Industry department, Dr Don Russell, will lead a whole-of-Government response to the BlueScope announcement and to work with locals to rescue then local economies.



A Local Employment Coordinator to provide practical advice at the local level and ensure workers get the help they need when they need it. The Local Employment Coordinator will also build partnerships between government, business and the community to generate economic activity and jobs in the local economy.



(For information about any of the assistance available in this package, call the Australian Government BlueScope Support Hotline on 1800 107 233.)

