South Australian-based steelmaker and iron ore miner Arrium has been placed in voluntary administration by its directors.

Key points: Arrium owes around $4.3b: $2.8b to lenders, $1b to suppliers, $500m to staff

Arrium owes around $4.3b: $2.8b to lenders, $1b to suppliers, $500m to staff Up to 8,100 Australian jobs at risk

Up to 8,100 Australian jobs at risk South Australian Treasurer to meet with banks tomorrow

South Australian Treasurer to meet with banks tomorrow Analysts blame poor management decisions for Arrium's debt crisis

Administrators from Grant Thornton will assume control of Arrium's day-to-day operations immediately, while working with lenders, staff, suppliers and government to review its business model.

Arrium has around 6,700 employees, with 1,600 in South Australia, 2,800 in New South Wales, 930 in Victoria, 900 in Queensland, 350 in Western Australia, 60 in Tasmania, 40 in the Northern Territory and 30 in the ACT.

However, it also has an additional 1,400 contractors in South Australia.

South Australia's Treasurer Tom Koutsantonis told a press conference that makes this "one of the largest administrations in recent memory in Australia".

"Administration is not the end. But we need cool heads to prevail, and that is why it's important that we have a cooperative relationship with all of the creditors," he said.

"I will be meeting with some of the banks tomorrow through telephone hook-ups or personally."

However, Arrium's Newcastle-based subsidiary Moly-Cop, which primarily manufactures products used in the mining sector, is profitable and not covered by the administration meaning jobs there appear to be much more secure.

Arrium also has global operations supplying various products for the mining sector, as well as an international recycling business.

Administrators seek to 'maintain business as usual'

None of the jobs are under threat immediately, with the administrators running the company as usual while they review its operations.

One of the administrators appointed, Paul Billingham, said the focus will be on making sure lenders, employees and suppliers get the maximum return possible from the amount they are owed.

"Voluntary administration provides Arrium and its stakeholders time to develop options that will help preserve long term value and optimise the position of its creditors," he noted in a statement.

"Our focus will be to stabilise current trading, maintain business as usual across the group's affected operations, identify ways to restore the performance of key business units and develop an optimal solution that maximises the return to creditors."

More than $4b owed to creditors

The move leaves the long-term future of more than 1,000 workers at Arrium's loss-making Whyalla steelworks in jeopardy.

However, Mr Billingham assured employees, customers and suppliers that he and his fellow administrators will attempt to run Arrium on a "business as usual basis" while their review of the business is underway.

Grant Thornton also said Arrium's overseas operations would be largely unaffected by their appointment, with Moly-Cop not included in the administration.

As required by law, the administrators will hold a first meeting of creditors within eight business days.

Grant Thornton also said its staff - Paul Billingham, Said Jahani, Michael McCann and Matt Byrnes - would conduct a thorough and impartial investigation of the events and actions that put Arrium in its parlous financial state.

Arrium owes banks and other lenders around $2.8 billion, including a billion to the big four Australian banks, along with a billion to trade creditors and around $500 million in employee entitlements.

Arrium earlier this week suspended trading in its shares after its lenders rejected a proposal worth up to $1.3 billion from US investment fund GSO Capital Partners to recapitalise the firm.

Arrium 'should have been repaying debt'

Morningstar's senior resources analyst Matthew Hodge said Arrium had no choice but to call in the administrators if it could not reach a deal with its banks, a big investor or a buyer.

"It was either administration or a deal, it had to do something," he told ABC News.

"That weight of debt was always going to be a problem and I didn't see them being able to pay that back, so it had to come some other way."

Mr Hodge said Arrium's management made a fatal mistake by expanding its iron ore mining at the same time other operators were ramping up production.

"They kept on ploughing it [cashflow] back into the ground, just reinvesting in other things, they should have really been repaying debt rather than reinvesting," he argued.

"The problem was that all the other mining companies were doing exactly the same thing too, which led to the oversupply and the drop in prices that we've got now."

Mr Hodge said Arrium will probably not be the last Australian iron ore miner to collapse either.

"I wouldn't be surprised if we see a little more action, particularly in the iron ore space," he added.

Federal Government 'stands ready to assist the workers'

Federal Industry Minister Christopher Pyne said he is disappointed by today's announcement.

Mr Pyne noted that the administrators are planning to keep the business running as usual in the short term, but said the Federal Government will continue to help any workers who do lose their jobs in the long run.

"The Government, through jobactive, already has a range of support services available for workers who have recently lost their jobs from Arrium. Any additional assistance would build on these existing employment services," he said in a statement.

"The State Government will have a key role to play in ensuring measures are in place to support any workers adversely impacted."

Mr Pyne added that the Federal Government had already taken actions that have assisted Arrium - such as bringing forward a rail contract, anti-dumping changes to limit cheap imported steel and removing the carbon tax - but no further regulatory support would be forthcoming.

"Despite this work by both the State and Federal Government, it is clear that the issues being experienced at Arrium are not able to be addressed with further regulatory interventions by government."