Australia's largest steelmaker BlueScope Steel will close one of its two blast furnaces and cut 1000 jobs after it reported a US$1.1bn loss.
It also called a halt to steel exports after struggling with a strong Australian dollar, high iron ore and coal costs and cheap steel prices. BlueScope said it would refocus on the domestic market to boost earnings.
The company said the decision was not due to the government's planned carbon tax, under which BlueScope will be compensated for the costs of the tax.
"The restructure will better position us for profit and growth in Australia and allow us to grow our presence in building construction markets....We will also focus on growth opportunities, particularly in Asia," said Managing Director Paul O'Malley.
The company plans to shut down its No. 6 blast furnace at Port Kembla in New South Wales, cutting production to 2.6Mt/y and its No.4 cokemaking battery, No.3 BOS steelmaking furnace and No.1 slab caster. It will also close its Western Port hot strip mill in Victoria.
It will cut 1000 jobs from a workforce of 9000. Around 800 jobs will be lost at Port Kembla and 200 in Western Port.
It reported a net loss of A$1.05bn (US$1.1bn), including writedowns, for the year ended June. The loss does not include any restructuring charges from the Monday's announcements, to be taken in the current fiscal year.
BlueScope said it expected to report a small underlying net loss in 2012, excluding the restructuring costs.
