The federal government has offered to work with Molycop to ensure it remains a key part of the Hunter's industrial manufacturing landscape.
It comes a day after the company announced that it would stop steelmaking at its Waratah plant as part of a company restructure.
The decision will make 250 of the 540 roles at the Waratah site redundant.
The decision to effectively end steelmaking in Newcastle reverberated through the Newcastle community in a similar way to when BHP announced the closure of the Newcastle Steelworks in the late 1990s.
Industry and Science Minister Ed Husic told the Newcastle Herald on Friday that he had spoken with Molycop's Australasian President Michael Parker following the announcement.
Mr Husic said he had extended an offer to work with Mr Parker to ensure the best possible outcome could be achieved for the company and its workers.
"I expressed my deep concern for the workers and their families affected by yesterday's announcement," he said.
"The government will continue to explore ways to support the Waratah operations through this restructure so it can continue to contribute to the Hunter economy as it has done for over a century."
Steel has been produced at the Waratah site since 1918.
Molycop has blamed a perfect storm of international and domestic factors for the closure of the Newcastle steel making operations.
The company warned in 2021 that without an increase in tariffs on imports of Chinese-made steel grinding balls, which are used in gold, copper and lithium mining, production using local steel would become unviable.
As difficult as it was, Mr Parker said Thursday's decision was necessary to align the Waratah business with Molycop's global operations.
Speaking in Newcastle as devastating news circulated through the community, Mr Husic recalled his father's experience of being made redundant in the steel industry.
"I'm thinking about those 250 employees and I feel very much for them," he said.
"I'm the son of a metal worker. Our family has been through periods where redundancies kick in and I know this will be a tough day and a tough few months as well. I feel for the families who have young kids who are wondering why their parents are so anxious because they are thinking about how they will pay the bills and put food on the table."
Australian Workers Union NSW branch secretary Tony Callinan said the union would work with Molycop to ensure all affected workers receive their full entitlements and re-training opportunities.
"This steel mill has been operating for over a century, sustaining livelihoods and the community," he said.
"Today's announcement represents a sad day for the Hunter and a sad day for the Australian manufacturing industry."
Molycop has confirmed its green steel research partnership with the University of NSW will continue despite its Newcastle steel making operations being shuttered.
The partnership has resulted in world-leading breakthroughs in the use of waste materials, such as coffee grounds and rubber tyres, as alternative sources of coke and coal.
