Tahmoor Mine Ordered into Liquidation Following Year-Long Closure
The Tahmoor coking coal mine, located southwest of Sydney and owned by Sanjeev Gupta's GFG Alliance, has been ordered into liquidation by the New South Wales Supreme Court. This decision, made on February 6, follows over a year of non-operation due to financial difficulties, impacting approximately 500 workers. The liquidation has resulted in 238 permanent staff redundancies, with liquidators Shaun Fraser and Jonathan Henry appointed to oversee the process and investigate the mine's financial collapse.
Background and Mine Closure
The Tahmoor mine ceased operations in February of the previous year after depleting its cash reserves amid financial difficulties within its owner, GFG Alliance. This led to approximately 500 workers, including contractors, initially being placed on minimum pay. By November, roughly half of these workers were no longer receiving wages.
The mine's parent company, Liberty Primary Metals Australia (LPMA), was placed into administration in November. This action followed an August winding-up application initiated by Coal Mines Insurance (CMI) seeking $4.7 million in unpaid premiums.
To prevent creditors from forcing the mine into liquidation, Tahmoor Coal itself was placed into voluntary administration in November, with Joseph Hayes from Wexted appointed as administrator.
Financial Obligations and Administration Efforts
Multiple parties were owed significant sums. The NSW government was owed approximately $29.4 million to $30 million in overdue royalties, leading State Resources Minister Courtney Houssos to decline removing a fixed charge on the mine's leases. CMI was seeking to recover $4.7 million in unpaid workers' compensation premiums.
Financial statements presented during court hearings in November revealed unpaid creditor claims exceeding $18.9 million, in addition to CMI's claims. Related-party debt constituted an estimated $250 million of the total $432 million in claims.
Administrators for LPMA, Michael Brereton of William Buck, stated that selling Tahmoor was central to realizing value for creditors. A formal expressions-of-interest process for the mine began in January and was scheduled to conclude on February 11.
Administrators reported strong interest, with six expressions of interest received before Christmas and additional parties approaching since then.
The objective was to maximize value and facilitate a swift restart of the mine, which was estimated to be valued in the hundreds of millions of dollars. LPMA chief executive Theuns Victor confirmed Tahmoor as an established underground longwall mine with substantial infrastructure and a skilled workforce, stating a preference for the colliery to be restarted as soon as possible.
Unsuccessful Sale Offers and Union Involvement
The Mining and Energy Union (MEU) expressed concerns that the prolonged closure risked permanent damage to the operation and job losses. The union confirmed that a $350 million offer was made in the week prior to February 6 by a consortium including RStar, the mine's primary contractor, directly to Sanjeev Gupta. The MEU supported this offer or a sale to any other reputable company, believing it would clear outstanding debts and fund the mine's restart.
GFG Alliance stated that the formal process managed by the deed administrators, William Buck, was the only pathway being considered for the sale.
The company indicated that speculative, conditional, or unfunded expressions of interest would not be entertained.
Court Decision and Liquidation
On February 6, Justice Ashley Black of the NSW Supreme Court issued a winding-up order for Tahmoor Coal. CMI continued to advocate for liquidation during the hearing. The newly appointed administrator, Joseph Hayes, requested a three-week adjournment, citing uncertainty regarding a $40 million funding commitment from Clydesdale, another Gupta-owned company, for the administration process. Christopher Withers SC, representing CMI, argued that liquidation would grant stronger powers to investigate loans and security arrangements made while the company was insolvent.
Justice Black described the decision as challenging, emphasizing that the liquidator would possess the authority to investigate significant transactions related to the mine's financial collapse.
Shaun Fraser and Jonathan Henry were appointed as liquidators.
Impact on Workers and Community Response
The liquidation has resulted in the redundancy of 238 permanent staff. Liquidators offered affected employees a brief window to either take six weeks of unpaid leave while a mine sale is considered or accept immediate redundancy. Many workers, citing prolonged uncertainty, indicated they would opt for immediate redundancy.
The MEU expressed disappointment with the outcome and stated plans to seek an immediate meeting with the liquidators to discuss the best outcome for its members and employees. GFG Alliance acknowledged the court's decision, stating that a sale conducted through voluntary administration would have offered the best opportunity to maximize stakeholder value and maintain employee continuity.
Wollondilly Mayor Matt Gould noted the significant distress among affected individuals, and volunteers from organizations such as Tahmoor Lions expressed concern for the community's economic stability, which had historically relied on the mine.