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Liberty Bell Bay Smelter Workers Face Pay Suspension; Administrators Seek Buyer for Australia's Only Manganese Facility

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Workers Face Pay Cut-off at Tasmania's Only Manganese Smelter

Approximately 200 workers at the Liberty Bell Bay (LBB) manganese smelter in George Town, Tasmania, have been informed their pay will cease after the current pay cycle ends on April 24.

The smelter is under voluntary administration, and administrators have stated there are insufficient funds to pay most employees beyond that date. Workers were given the options of taking leave without pay or accepting redundancy.

The workforce is requesting that the Tasmanian and federal governments provide funding to cover payroll costs—estimated at approximately $1.6 million per fortnight—until a buyer for the facility is secured.

Background

The LBB smelter is the only facility in Australia capable of processing manganese alloy, a material used in steelmaking. The facility was placed into voluntary administration in March after its parent company, GFG Alliance, failed to lodge financial statements for five years.

External administrators from Ernst and Young (EY), funded by White Oak Commercial Finance, are conducting a sales process for the smelter. Administrators have stated they hope to secure a buyer within approximately six weeks.

The facility has been in limited operation since May of the previous year. The Tasmanian government previously provided a $20 million loan to GFG Alliance for the purchase of manganese ore; a 23,000-tonne shipment arrived in October but has remained unused. In late January, the Tasmanian government appointed receivers to secure this ore stockpile.

Government and Regulatory Actions

ASIC Wind-Up Proceedings

The Australian Securities and Investments Commission (ASIC) has initiated proceedings in the NSW Supreme Court to wind up Liberty Bell Bay Pty Ltd. The regulator has stated that the company failed to lodge annual financial statements for the financial years ending 2021, 2022, 2023, 2024, and 2025.

ASIC previously obtained court orders in June to compel compliance, which the company reportedly failed to meet. ASIC has designated financial reporting misconduct, including failure to lodge reports, as an enforcement priority.

Government Financial Support

The Tasmanian and federal governments have agreed to provide a $3 million loan to cover wages for three weeks, split evenly between the two governments. A subsequent $1.6 million funding package provided an additional two weeks of wage support, presented to administrators on May 19, shortly before the previous extension expired.

The governments stated the loan aims to maintain workforce and industrial capability during buyer discussions.

Statements and Positions

Tasmanian Government

  • Minister for Energy and Renewables Nick Duigan: The state government is working on a support package for the workers. The package would require federal government involvement, as the Commonwealth has previously provided support to smelters in other states.
  • Tasmanian Premier Jeremy Rockliff: The wage support is intended to give the sale process the best possible chance. The owners "have let us down, big time" and "deserted the community and deserted the workforce." He did not rule out further support if a buyer is not found.
  • Minister for Business, Industry and Resources Felix Ellis: The government will closely examine potential buyers to ensure they can invest in the plant's future. Regarding the loan default, Ellis stated that GFG had not fulfilled commitments to restart operations or repay the loan.

Federal Government

  • Federal Industry Minister Tim Ayres: A spokesperson stated the Commonwealth would work with the state government to support workers and local suppliers. Minister Ayres described the smelter entering administration as an "extraordinary development" and stated that the person "squarely responsible" for the debts is "the bloke who ran GFG." He supported ASIC's winding-up action, emphasizing that businesses must comply with Australian law.

Union Representatives

  • Chris Clark, Communications, Electrical and Plumbing Union: The requested support is "small" compared to federal bailouts provided to other smelters, including Rio Tinto's Boyne aluminium smelter ($2 billion) and the Nyrstar smelter in Port Pirie ($135 million).
  • Chris Donovan, Australian Workers' Union: The site's weekly wage bill is approximately $1.6 million. $5 million would cover workers until a sale is finalized.
  • Robert Flanagan, Tasmanian AWU Branch Secretary: The funding is welcome, but worker anxieties persist. The smelter contributes $340 million to the Tasmanian economy when operating.

Political Figures

  • Liberal Senator Jonno Duniam: Keeping the smelter operational is vital for preserving national sovereign capabilities, advanced manufacturing, and AUKUS-related needs.
  • Tasmanian Labor Leader Josh Willie: The workers' contribution to the state's economy should be recognized, especially during a cost-of-living crisis.
  • Tasmanian Labor MPs Janie Finlay and Jess Greene: Expressed support for the funding and urged continued cooperation until the smelter's future is secured.

Administrator

  • Morgan Kelly, EY Parthenon: The underlying business is viable, and a sale is expected among interested Australian and international bidders. The bids received are predicated on retaining the full workforce. Temporary workforce adjustments are necessary to continue limited operations during the sale process. The funding supports employee retention during the sales process.

Company (GFG Alliance)

  • GFG Alliance stated that the receiver appointment pertains only to the ore stockpile and does not restrict ongoing efforts to secure the smelter's future. Workers remain on standard shift rosters.

Future Prospects

Administrators have indicated there are multiple prospective buyers. GFG Alliance has entered into a memorandum of understanding (MOU) with Steel International Trading Company (SITC), a Georgia-based exports firm, for a potential lease arrangement to operate the smelter for up to five years. Negotiations and due diligence with SITC are ongoing.

Ray Mostogl, CEO of the Tasmanian Minerals, Manufacturing and Energy Council, stated that federal support for Liberty Bell Bay is improbable given GFG's past financial issues. Mostogl views the MOU with SITC as the primary hope for the smelter's continued operation.

Local industry groups and the unions have stated that retaining the highly skilled workforce is key to a successful sale. The administrator emphasized that the value of the sale includes the operational smelter, supplier and customer networks, and the workforce.

Impact on Local Suppliers

Susie Bower, chief executive of the Bell Bay Advanced Manufacturing Zone, reported that Liberty Bell Bay owes at least five local businesses a collective sum of $1.3 million. Some suppliers have not received payments since December, leading to significant financial difficulties, including job losses and potential business closures.

Worker Perspectives

  • Mikayla Binns, a fourth-year apprentice boilermaker, expressed concern about finding new employment.
  • John Dusautoy, an employee with nearly four decades at the smelter, said the news about pay "really hit home" and called for government assistance.
  • Ben Manion, a systems administrator, stated the three-week payment was "better than nothing" but expressed disappointment and concern about long-term job security. He is seeking other employment.