The fallout from a major South Australian mine closure has worsened, with dozens of contractors now also facing job losses alongside hundreds of mine workers.

More than 200 workers from the high-quality iron ore mine arrived back in Adelaide on Thursday, greeted by emotional family members after being stood down with little notice.

WATCH THE VIDEO ABOVE: SA mine closure leaves hundreds of jobs in limbo

Know the news with the 7NEWS app: Download today

The workers boarded coaches in Coober Pedy on Thursday morning for the long journey to Adelaide, arriving at Agile Mining Services headquarters at Parkside.

It has been a day of tearful goodbyes after a whirlwind 24 hours for staff affected by news that the mine will be all but abandoned.

Staff say management told them at a meeting that negotiations with the mine’s Chinese backer, the YG Group, had fallen through over claims of tens of millions in unpaid debt.

“We’ve got the meeting, sort of seen it on the news. We just got told we stood down and until further notice, take annual leave until we hear back,” worker Scott said.

Workers arriving back in Adelaide. Credit: 7NEWS

The Agile Group stood down workers. Credit: 7NEWS

Sources within the Agile Group have revealed up to 50 contractors have also been blindsided by the news.

Buzzard Mine is currently the only mine in South Australia to use the Horizon rail line for its mineral exports. It is also a key exporter from the Whyalla port.

Sources say there is enough iron ore to sustain the port in the short term, but the long-term future remains uncertain.

The state government says it is monitoring negotiations between Agile Mining and the YG Group, hoping to restart the mine it says is commercially viable.

The mine is a major iron ore producer. Credit: 7NEWS