Liberty Bell Bay enters voluntary administration after ASIC intervention

Topic:Mining and Metals Industry

Liberty Bell Bay's smelter is the only manganese alloy smelter in Australia. (ABC News: Maren Preuss)

In short:

The owner of Australia's only manganese smelter has entered voluntary administration after failing to lodge financial statements for five years.

Liberty Bell Bay was one of GFG Alliance's last remaining Australian assets, but has been in limited operations since May last year, despite a loan from the Tasmanian government.

What's next?

Ernst and Young was appointed administrator and will work with governments and unions to keep the smelter operational.

The owner of the Bell Bay manganese smelter in northern Tasmania has entered voluntary administration following an intervention by the corporate regulator earlier this month.

Ernst and Young has been appointed as administrator of Liberty Bell Bay (LBB), and says it will work with governments and unions to ensure the smelter's ongoing operations.

It will also meet with the company's estimated 216-strong workforce.

Ernst and Young will attempt to secure further funding for operational costs and for employee wages, with its primary role to restructure or sell the company.

The existing management team remains in place.

Morgan Kelly, from Ernst and Young, said they will engage closely with state and federal governments.

The Australian Securities and Investments Commission (ASIC) applied to wind up and liquidate LBB — a subsidiary of GFG Alliance, owned by Sanjeev Gupta — over its failure to lodge financial statements for five years.

The case came before the New South Wales Supreme Court on March 16.

Major lender White Oak Commercial Finance made the decision to place LBB into administration.

Federal Industry Minister Tim Ayres said GFG had failed to provide "a clear future pathway for workers, the community and local businesses".

"The government will work closely with the administrators and the Tasmanian Government to ensure workers and local suppliers are supported and receive appropriate assistance."

GFG has been contacted for comment.

Uncertainty and turmoil

The smelter is the only manganese alloy smelter in Australia, and was bought by GFG Alliance in 2020 following a period of uncertainty under its previous owner, South32.

But the smelter's future was again unclear when GFG's financier Greensill Capital collapsed in 2021.

GFG's Australian operations went through a period of turmoil, including the South Australian government forcing its Whyalla steelworks into administration due to an estimated $300 million in debts.

GFG's Tahmoor Colliery in New South Wales also entered liquidation, resulting in 238 job losses.

LBB placed the Bell Bay smelter in limited operations in May last year, blaming a loss of ore supply due to a cyclone.

The Tasmanian government provided the company with a $20 million loan in August, of which $14.5 million was used to buy a 23,000-tonne shipment of ore with hopes the smelter would restart operations.

The ore was delivered in October, but was not used, and in January the Tasmanian government appointed receivers to protect the ore.

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