Treasurer Rob Lucas is keeping alive the chances of reaching a deal with financially-troubled Nyrstar by next month.
He spoke on Thursday night after responding in parliament to the company's ratings downgrade and other bad financial news from Europe.
He said that in November the government and the company had planned to reach a deal on payments toward a $291 million government loan guarantee by the end of next month.
"We still hope we might be able to reach some sort of agreement by then," he said.
But he said the "stories out of Europe" in recent days and weeks had indicated problems for the company.
Asked to decide between the $291 million payment and the survival of the company in Port Pirie, he said he would not speculate on "what-if" scenarios.
He said such speculation did not help workers and their families.
"It is a challenging environment in terms of their financial future," he said.
“It is a challenging environment in terms of their financial future.”
- State Treasurer Rob Lucas
Asked about suggestions that Whyalla steel-maker Sanjeev Gupta might bid for the smelter, he said did not know that to be the case and he could offer no useful comment.