After a member of the consortium designated as preferred buyer of the Liberty Bell Bay manganese smelter withdrew from the transaction, the mothballed facility has been given a six‑week reprieve as administrators continue negotiations.
Adroit Capital’s withdrawal on a mid-June Friday set off a flurry to secure a new source of funding, but in a subsequent closed-door stakeholder meeting, no final decision was reportedly made about the smelter’s future.
It has not been confirmed whether negotiations consider a new party to the consortium, the remaining members of the original consortium, or an entirely new consortium.
Employing more than 200 workers, the smelter has received more than $9 million in government assistance since entering voluntary administration in March.
As the nation’s sole domestic producer of manganese alloy, a crucial material for steelmaking used in construction and defence, maintaining the facility’s specialist industrial capability is seen as vital to Australia’s sovereign interests.
Australian Workers Union assistant secretary Robert Flanagan told the ABC there was still hope a sale could be secured, noting the consortium’s willingness to continue funding administration costs had given workers some confidence that a transaction remained likely.
“There is a level of certainty – for the next six weeks, the administration process will be funded.”
He said the funding was being provided by a consortium “which has the intention of purchasing the business”, but offered no further details. He added that workers who had been bracing for job losses welcomed the update.
Flanagan said: “Workers have had a very difficult weekend; their expectation was that their employment would be terminated today.
“It’s a welcome reprieve – it means that again there is a pathway forward, potentially.
“To have some certainty for the next six weeks is something really valued by the workforce.”
Flanagan said workers would meet with administrators again to address the many outstanding questions about the process.
The administrators of the shuttered smelter recently revealed the consortium led by WA-based mining investor Adroit Capital was selected as the preferred bidder, beating out two other offers and entering into exclusive negotiations.
It also comprised US private equity fund White Oak Global Advisors and ASX-listed manganese company OM Holdings.
The consortium had indicated it could raise tens of millions of dollars in equity and then seek additional borrowing to restart the plant, and had not suggested it required further state or federal funding.
Tasmanian Premier Jeremy Rockliff welcomed the now in-question agreement, emphasising that protecting local jobs and small businesses remained the top priority.
Rockliff said: “The additional joint bridging support will ensure the workers have the support they need over the next eight weeks while EY progresses the sales process,” he said at the time.
“This additional funding will provide some surety while due diligence continues with [the consortium].”
Rockliff added that the state government stood firmly behind workers, their families, and the small businesses affected by the shutdown.
He said: “Liberty is the only manganese smelter in the country, and we have invested to support the workers and keep this sovereign capability in Northern Tasmania.
“Our government established the Bell Bay Response Team, and we provided a $20-million loan for ore to restart operations at Liberty.
“We have been in regular communication with the federal government and worked with them to deliver this employee support package.
“Tasmanian manufacturing jobs are critical to our community, our state and our nation.”
The smelter has been in care and maintenance since May last year, and was placed in voluntary administration in March following mounting financial issues under the previous owner, Sanjeev Gupta’s GFG Alliance.
In August last year, the smelter (still owned by GFG) was handed a $20-million Tasmanian government loan, $14.5 million of which was used to buy a 23,000-tonne shipment of ore, which was delivered in October.
By January of this year, the Tasmanian government confirmed that GFG had defaulted on the loan and appointed another accounting firm, Deloitte, as receiver to take control of the pile of ore.
Felix Ellis, Tasmanian Business, Industry, and Resources Minister, said the ore was still onsite.
He added: “Part of the strategy has been to ensure it’s available to be fed into the smelters at the quickest possible point pending sale.”
In March, the Australian Securities and Investments Commission (ASIC) filed action in the New South Wales Supreme Court, alleging Liberty Bell Bay had failed to lodge annual reports for the financial years ending in 2021 through 2024, inclusive.
These proceedings were dropped at the end of April.
Another business formerly owned by GFG – the Whyalla steelworks in South Australia – was forced into administration by the SA government in February last year.
Federal Minister for Industry Tim Ayres said the Albanese government always viewed the workers at Liberty Bell Bay as central to the facility’s value, and it was encouraging to see this recognised, alongside the potential of a well-run operation.
Ayres said: “It is an unusual step to take for two governments to step in and support workers’ wages during administration, but it’s the right thing to do.
“The future is not certain, and I’ve been deeply worried as this has moved along about how tough it’s been for that group of workers.”
When the sale was initially announced, Prime Minister Anthony Albanese said the federal government was backing the workers, their families, and the community through the sales process because the facility and its jobs mattered.
Albanese thanked the Tasmanian government and all local MPs for working with the Commonwealth to support Australian manufacturing.
He said: “We need to build more things here as a country – and that includes in Northern Tasmania.”
Ben Manioin, a worker at Liberty Bell Bay, expressed caution to the ABC.
Manion said: “We’ve been bitten once before by someone coming in and buying us and then taking all our money away.
“So, there’s a bit of concern around the site that that doesn’t happen again.”
