Federal industry minister Christopher Pyne says the management of troubled steelmaker Arrium is to blame for putting thousands of jobs at risk.
Troubled steel and mining group Arrium has been placed in voluntary administration, following discussions with its lenders.
The company, which suspended trading in its shares on the stock exchange on Wednesday, has appointed Grant Thornton as administrators, with executive control to be transferred immediately.
Arrium shares were put in a trading halt on Monday, and suspended on Wednesday, after its lenders rejected a $US927 million ($A1.23 billion) funding deal with Blackstone fund GSO Capital Partners that would have involved bankers taking a severe haircut on their debts.
The cash-starved company had struggled to come up with alternative proposals.
"It has become clear to the board that it has, unfortunately, been left with no option other than to place the relevant companies into voluntary administration in order to protect the interests of stakeholders," the company said in a statement on Thursday.
Grant Thornton say the administrators will maintain business as usual across the group's operations, but will undertake an urgent and comprehensive review of the core Australian steel and mining businesses.
"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," Grant Thornton managing partner Paul Billingham said on Thursday.
Arrium, formerly known as OneSteel, has been hit by the plunge in iron ore and steel prices over the past two years and delivered a full-year loss of $1.9 billion in 2014/15.
The company, which formerly operated as mining giant BHP's long steel products division, has been weighed down by a $2.1 billion debt load, as its flagship Whyalla steelworks and iron ore mining business in South Australia continued to drain cash.
However, its Moly-Cop business, the world's largest supplier of grinding media used in mining and construction, has remained profitable.
Arrium shares last traded at 2.2 cents, and have lost nearly 80 per cent of their value in the past three months.