Molycop to cease steel-making operations at Waratah, leading to 250 job losses

Almost half the 540-strong workforce at Molycop’s steel manufacturing plant in Newcastle, New South Wales will be cut following a restructuring of the site, according to reports by Australian news outlets. 

Molycop Australasia president Michael Parker said it was a hard decision to cut jobs, but one that “best positions Molycop Australia for success over the long term”. 

"It will be a challenging time as dedicated employees leave our business, and the company is committed to providing comprehensive support for those employees,” he said. 

"The company will continue to manufacture its range of leading grinding media, rail wheels and other specialised steel products at the Waratah site." 

However, Tony Callinan, the Australian Workers’ Union New South Wales Branch secretary, criticised the decision, saying the announcement will come as a painful shock to workers, many of whom have worked at that site – which opened in 1918 – for their whole working lives. 

“This steel mill has been operating for over a century, sustaining livelihoods and the community. Today’s announcement represents a sad day for the Hunter [Valley] and a sad day for the Australian manufacturing industry,” Callinan said. 

Brad Pidgeon, Newcastle regional office lead organiser for the Australian Manufacturing Workers Union, echoed Callinan sentiments, adding that the decision was made without warning. He was also sceptical about future work at the Waratah site as steel was “cheaper now to import from overseas as opposed to manufacturing it here through scrap steel”. 

Worries over cheaper imports

Molycop is owned by US-based private equity firm American Industrial Partners (AIP). In 2021, the firm threatened to shut its Waratah site and cut up to 300 jobs unless the Australian federal government’s Anti-Dumping Commission agreed to increase tariffs on imports, particularly from China. Dumping is the practice of exporting goods below their normal prices in their country of export, either to win market share or to get rid of excess products. 

Molycop sought tariffs on Chinese-made steel grinding balls, which are used in gold, copper, and lithium mining. The move was said by others to be a tactical ploy by the firm who were considering selling the enterprise which was valued at around A$2bn (US$1.3bn). 

In 2016, Australia’s Anti-Dumping Commission found Molycop’s state-backed Chinese competitors had been subsidised and imposed tariffs on their grinding balls, in some cases up to 34%, but these were due to expire in September 2021. 

The tariffs were extended, however, for a further five years after Molycop went to the AWU with its concerns.