Firefighters created a dam of soil around the iron to stop it spreading and protect the surrounding buildings.
``It's thousands of degrees centigrade in temperature and if it's exposed to the external atmosphere of water and rain, it will explode and vaporise. You get steam inside metal and it will start to pop,'' Mr Lakin said.
``It's almost like a volcanic eruption in a way, you channel it into a particular area.''
The dam was built within an hour and it took about four hours for the iron to discharge.
Mr Lakin said the incident would have a financial impact for New Zealand Steel.
``It's a big steel mill, it's probably the biggest in the country so I'm sure it's got some financial impact for them.''
A New Zealand Steel spokeswoman said the molten iron spilled from one of the two melters. There were no injuries and no adverse environmental impacts.
The internal and external emergency response workers secured the situation ``very quickly'' and left about 2.30am.
The spokeswoman said an internal investigation was underway to determine the cause.