Steve Hamer of Arrium. IRON and steel company Arrium says it cannot rule out mothballing its Whyalla steelworks in South , putting question marks over its rolling mills in Newcastle.

The Newcastle mills on the former BHP site receive all of their feedstock by rail from Whyalla.

’s other steelmaker, Bluescope Steel, this month struck a deal with its unions to cut 500 jobs to keep its Port Kembla steelworks opening, preserving 5000 jobs.

In an announcement on October 1, Arrium unveiled plans to cut $100million in costs over two years from Whyalla, on top of existing plans to cut $60million in costs company-wide.

At the time, Arrium boss Steve Hamer said steel industry conditions were the worst he had seen and that the federal government was failing to protect the domestic industry from steel dumped in at below-cost prices.

Mr Hamer said the company had to consider all of its options.

‘‘We need to look at our business model all the time including imports, blast furnace, electric arc furnaces, do we mothball or run our production down, all those sorts of questions,’’ Mr Hamer said.

‘‘That [mothballing Whyalla and importing raw steel] is a live and active question in our business.’’

n Workers Union Newcastle branch secretary Richard Downie said companies sometimes threatened to shut down plants in the heat of negotiations, but the union was keeping a close eye on things, regardless.

In event of a mothballing, the impact on Newcastle would depend on whether Arrium imported finished steel products that were ready to sell or whether it imported billets to be rolled at Newcastle.

An Arrium spokesman acknowledged Mr Hamer’s comments but said the focus was on cost-cutting, not shutting plants.