About 110 employees at BlueScope's Western Port mill at Hastings, south-east of Melbourne, will lose their jobs in the coming months, along with about 60 contractors, the company said yesterday.

Production at the mill was being scaled down from mid-March to provide significant cost savings, BlueScope Australia and New Zealand chief executive Mark Vassella said.

"Whilst domestic coated steel demand has not materially declined, this is part of our strategy to continually find better ways to do business and remain a cost-effective producer," he said.

BlueScope received $100 million in federal government assistance in 2011 as part of Canberra's $300 million steel transformation plan to help steel producers cope with the effects of the carbon tax.

AWU Victoria secretary Cesar Melhem said the funding should now come under scrutiny.

"Questions have to be asked about how that money has been used," Mr Melhem said yesterday.

"The federal government cannot race in with assistance for companies every time they experience difficulties."

The 170 job losses come on top of 300 positions made redundant at Western Port 15 months ago.

Opposition climate action spokesman Greg Hunt said it was a blow to the local community, especially coming after steel industry job cuts last year.

"Every day, we are seeing jobs being lost in Australia," he said yesterday.

"The federal government is creating the economic conditions that are seeing long-term businesses shed Australian jobs."

Acting Industry Minister Chris Evans branded Mr Hunt's comments as "the height of hypocrisy", saying the Coalition had opposed steel industry support measures and BlueScope had made it clear the carbon price would not adversely affect its business.

"Attempts by the Coalition to draw the assumption are both misleading and highly irresponsible," Senator Evans said.

BlueScope has already shed 800 jobs at its Port Kembla plant in the Illawarra and 200 positions at Hastings, while 400 contractors were terminated.

The August 2011 jobs announcement came as BlueScope posted the first of two consecutive annual losses of $1 billion, blaming the high Australian dollar and weak steel market for the results.

Mr Vassella said the company would keep currently operating lines and assets open at Western Port.

Mr Melhem said that was one reason for optimism about the site, which has 500 remaining BlueScope staff and 100 contractors.

"The option remains open for new jobs to be created as demand increases," he said.

But Mr Melhem said he did not expect many employees to take voluntary redundancies.

Victorian Premier Ted Baillieu said the high Australian dollar, strong competition in the industry and the volatile prices of steel and iron ore would continue to put pressure on the sector.

He said the state government would work with BlueScope and the federal government to ensure all workers' entitlements were preserved.

Mr Baillieu said the job cuts would not change the government's plans to locate a second Melbourne container port at Hastings.

Victorian opposition industrial relations spokesman Tim Pallas said the state government was not rolling out projects to create jobs, noting the state's 5.8 per cent unemployment rate was well above the national average of 5.2 per cent. AAP

RECENT WOES

• 170 workers – 110 BlueScope staff and 60 contractors – to be axed from mid-March at the Western Port facility

• Currently 800 employees at the plant – 600 BlueScope staff and 200 contractors

• Production at the mill to be scaled down, with a one-off cost of $17 million

• Follows 1400 job losses announced in August 2011

• 300 workers – 200 staff and 100 contractors – were made redundant at Western Port 15 months ago

• 1100 positions – 800 workers and 300 contractors – cut from its Port Kembla plant in NSW

• BlueScope has posted consecutive annual losses of $1 billion, citing the high Australian dollar and weak  steel  market

• Received $100 million of the federal government’s $300 million steel industry plan to help it adjust to the carbon tax.       AAP