A complete shutdown of the Illawarra's steel industry would devastate the economy with more than 10,000 job losses and $2.4 billion wiped off the region's economy.
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New modelling has explored the nightmare scenario if BlueScope Steel decided to quit Port Kembla and steel-making capacity evaporated.
Economic modelling by the University of Wollongong and the Illawarra Regional Information Service, based on 2011 figures, show job losses would mount to 10,000 - in direct steelworks job losses and flow-on losses in other sectors.
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About $860 million in household income would also go, wiping $2.41 billion from the economy.
The decision was one extreme option BlueScope considered before it decided last August to restructure its steel making with the loss of 800 jobs, alongside 300 contractor positions, at Port Kembla.
Since then the company has affirmed its commitment to the region, but that hasn't stopped Illawarra's concerned leaders seeking some raw numbers to model the impact.
Steelmaking employs about 10 per cent of the Illawarra workforce, accounting for 13 per cent of household income and 4.4 per cent of gross regional product.
The report is labelled "draft", however the Mercury understands the numbers represent final figures awaiting release.
It shows direct and flow-on impacts of a decision to end steelmaking in the region would touch all aspects of the Illawarra economy, with mining, finance, insurance, retail and transport among the worst affected sectors.
"For the first time, the region's leaders and policy decision-makers are quietly contemplating the very real possibility of a complete shutdown of the Port Kembla Steelworks in the not too distant future," it states.
A BlueScope spokesman said the company was committed to the region, evidenced by its decision to begin two projects after the initial job cuts decision.
"We are continuing to invest in the Port Kembla plant, for example, in the past several weeks, BlueScope Steel has implemented two major projects at the hot strip mill during its annual major plant shutdown," he said.
"Both are significant capital reinvestments in our steel-making assets … [and] reinforce BlueScope's intention to remain a viable steel manufacturer in the Illawarra region".
