Taliban fighters are taking back large parts of the Afghanistan province where Australian forces were based for eight years.
Australian troops first deployed into Oruzgan Province in 2005, with more than a 1000 serving there at the peak.
All withdrew at the end of 2013, but some 400 Australian personnel remain in a variety of mentoring and assistance roles in Kabul and Kandahar.
Most of Australia’s 41 casualties occurred in Oruzgan.
US-based security consultants Triple Canopy said a large number of Afghan local police had defected to the militants since the death of the province’s police chief Matiullah Khan.
Khan was assassinated in a suicide bombing in Kabul two months ago.
“Security for Oruzgan province has become increasingly challenging,” the consultants said in a report covering the last week in May.
“At the very least some 50 security force posts are understood to have fallen to the Taliban advance.”
There have been reports of dozens of deaths in fighting, as well as beheadings.
International agency Cordaid reported this week it was becoming increasingly difficult to provide health care in the province due to fighting.
Cordaid and the Afghan Health and Development Services (AHDS) are caring for 420,000 residents of Oruzgan with 24 clinics.
“Since the most recent offensive of anti-government elements in Oruzgan, starting the beginning of May, six clinics of AHDS had to shut down,” the agency reported.
“Two clinics reopened, three remained closed and one clinic in Dezak village was burned down in the clashes between armed groups.”
Staff were receiving threats from the Taliban.
Since the start of 2015 across Afghanistan there have been 26 aid workers killed, 17 wounded and 40 abducted.
A report by the United States Institute of Peace released last month was highly critical of how Western nations had left Oruzgan province.
It found Dutch, American, and Australian forces in Oruzgan moves to reintegrate Taliban commanders and disgruntled elders “did not fundamentally alter the political environment” in the province.
While some Western officials sought to set up more inclusive local governments, others had simply struck deals to get Taliban commanders off the battlefield.
Each country and agency had their own “tribal darlings” and there was no consensus on the future of the political situation.
Progress was unlikely while the government in Kabul failed to be more inclusive, the report said.
Comment was being sought from Defence.