A radioactive piece of material is missing at a steelworks site on South Australia's Eyre Peninsula, prompting an investigation by authorities.

The South Australian Environment Protection Authority (EPA) said it was investigating the loss of a device with a radioactive source that was reported missing from the Liberty OneSteel steelworks in Whyalla on September 28.

Keith Baldry from the EPA told ABC Radio Adelaide's David Bevan that the missing device was an industrial bin level gauge.

"It's a Cobalt-60 radioactive source," he said.

"It's quite small, just a few millimetres in a 50 kilogram container," he said.

In a statement, the EPA said the container, designed to shield a source 100 times larger, meant radiation levels were difficult to detect "if the item was under waste material".

"It's about 35 years old so it's decayed to about 100 times less than [when] it was new, so in the container it's actually quite difficult now to detect," Mr Baldry told ABC Radio Adelaide.

In January, a radioactive capsule went missing along a 1,000 kilometre stretch of road in Western Australia, sparking a massive search for what experts called a "needle in the haystack".

However, this incident is different, with authorities believing the industrial gauge is still somewhere on the steelworks site.

"But it is something that obviously should not happen and when we were notified by OneSteel we immediately mobilised our emergency response team to the site to confirm there was no immediate risk to workers or the public," Mr Baldry said.

Based on its assessment of the incident, and the fact the radioactive material has decayed to 100th of its original activity, the EPA said in a statement that it "does not believe the gauge poses a risk to workers or the public".

"It should not be picked up or handled but it still doesn't present a significant risk," Mr Baldry told ABC Radio Adelaide.

Mr Baldry said the evidence so far suggested the device has been "likely incorporated into some of their waste piles".

"And on that basis we don't think there is a risk, however it should not be allowed to be collected up with the waste and put into the waste pile," he said.

In a statement, the EPA said "extensive radiological and physical searches" were undertaken over a period of eight days but the gauge has yet to be found.

SA Police, the Metropolitan Fire Service and the Commonwealth Australian Radiation Protection and Nuclear Safety Agency were also notified at the time.

In a statement, a spokesperson for the steelworks' umbrella company GFG Alliance said the measurement device was "moved during maintenance works".

"There is no evidence that the device has left the Whyalla Steelworks site," the spokesperson said.

"A radiation expert has been engaged. The device is not considered to present a risk to worker or public health."

Why does the steelworks need radioactive material?

Dr Edward Obbard, a nuclear materials engineer at the University of New South Wales, said radiation was penetrating and "shines through things like steel".

He said radioactive sources could be used to measure the thickness of steel plates or find gaps in casting and wells, as well as using it as level gauges.

"Radiation is very useful, lots of applications in heavy industry," he said.

Dr Obbard said the gauge could be safely disposed of once its radioactive source decays down to below an exemption level.

"Being radioactive and having a half-life, they are in fact in the process of vanishing, that's what the half-life means," he said.

"So you don't really have to do anything with them in terms of waste management.

"You just have to A) do nothing and B) continue to be responsible for the material while it's decaying.

"So the reason this is an incident is because someone has lost responsibility for the material while it was decaying and it's now a nuclear security incident, meaning it's gone outside of regulatory control, and we have to find it again."

The EPA said it was investigating the circumstances that led to the radioactive source being lost.