Australia's peak business lobby group has cautioned against a protectionist stance in the wake of the crisis circling troubled steel and mining group Arrium.
"Australia must not give up on driving reform in the parts of the economy that are globally uncompetitive," the Australian Chamber of Commerce and Industry (ACCI) said on Friday.
"Australia can have a viable steel industry if appropriate infrastructure and workplace relations policies are in place," it said in a statement.
The lobby group's warning came amid calls to protect the country's steel industry and ensure Australian steel is used in government construction projects.
Greens MP David Shoebridge has urged the government in NSW, where Arrium employs 2800 people, to immediately legislate for local steel procurement.
The federal Labor party has also outlined a plan that would force Australian governments to use local steel for infrastructure projects.
While federal industry minister Christopher Pyne sounded open to the idea, Treasurer Scott Morrison dismissed the idea as a "knee jerk reaction".
Arrium entered voluntary administration on Thursday after failing to win the support of its lenders for a $US927 million lifeline from US private equity fund GSO Capital Partners.
The jobs of nearly 6700 Arrium employees are at risk as the new management team grapples with options to stem the cash drain from its iron ore mining business and steel plant at Whyalla in South Australia.
Analysts have flagged a possible break-up of the company, with the loss-making businesses closed down and the profitable MolyCop division likely to be sold off, if a restructuring is not successful.
Meanwhile, the administrators of the beleaguered company have told employees and creditors it will be business as usual for the next two or three months while they review the company's situation.
Administrators Grant Thornton said Arrium had no immediate cash concerns, and did not anticipate redundancies while the review is under way.
The administrators have committed to make payments for ongoing supplies and plan to retain the existing management structure.
Grant Thornton managing partner Paul Billingham on Friday met with Arrium union officials in Adelaide and said the company's workers are the administrator's first concern.
Administrators will focus on stabilising current trading, maintaining business as usual and identifying ways to restore the performance of key business units.
Mr Billingham has met with South Australian Treasurer Tom Koutsantonis and will meet federal Industry Minister Christopher Pyne later on Friday to discuss the way forward for the company.
The administrators will hold their first meeting with creditors in Sydney, on April 19.
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