Liberty Bell Bay Manganese Smelter in Administration, 200 Jobs at Risk
The Tasmanian and federal governments have agreed to a $3 million loan to cover three weeks of wages while administrators seek a buyer for Australia's only manganese alloy producer.
Current Situation and Workforce Impact
On March 23, 2024, Liberty Bell Bay Pty Ltd, a subsidiary of GFG Alliance, entered voluntary administration. External administrators from Ernst & Young (EY) were appointed by major lender White Oak Commercial Finance.
The administrators informed the workforce that insufficient funds were available to pay most employees beyond their pay cycle ending April 24, 2024. Approximately 175-200 workers were initially given an ultimatum to either take indefinite leave without pay or accept redundancy.
Following negotiations, the Tasmanian and Commonwealth governments agreed to provide the $3 million loan, split evenly, to cover wages for three weeks. This support replaced the initial ultimatum and extended a decision deadline for workers.
Background and Financial Difficulties
The Bell Bay smelter is Australia's sole facility for processing manganese alloy, a material used to strengthen steel. GFG Alliance acquired the site in 2020.
The smelter reduced to limited operations in May 2023, with GFG citing iron ore supply issues and market volatility. In August 2023, the Tasmanian government provided Liberty Bell Bay with a $20 million loan, with $14.5 million used to purchase a 23,000-tonne shipment of manganese ore that arrived in October. The smelter did not resume full operations, and the loan was not repaid.
In late January 2024, due to continuous defaults, the Tasmanian government appointed receivers and managers specifically to secure the ore stockpile funded by its loan.
Separately, the Australian Securities and Investments Commission (ASIC) has applied to the Supreme Court of New South Wales to wind up Liberty Bell Bay Pty Ltd. ASIC states the company has failed to lodge annual financial statements for the past five financial years (2021-2025).
Administration and Sale Process
Administrator Morgan Kelly of EY has stated the underlying business is viable and that a sale process is underway. Reports indicate there are approximately a dozen interested Australian and international bidders, with site inspections conducted.
The administrators have indicated that bids received are predicated on retaining the full, specialized workforce, which is considered a critical asset. The estimated timeframe to secure a buyer was initially cited as two to six weeks, though some sources suggest the process could take longer.
The weekly wage bill for the site is estimated at approximately $1.6 million.
Statements from Stakeholders
- Administrators: EY's Morgan Kelly stated the objective is to keep the workforce intact during the sale process and that temporary workforce adjustments were necessary to continue limited operations.
- Tasmanian Government: Premier Jeremy Rockliff stated the wage support was intended to "give the sale process the best possible chance," criticizing GFG Alliance for letting down the community.
- Federal Government: Federal Industry Minister Tim Ayres stated the government is working with the Tasmanian Government to support workers and local suppliers.
- Unions: The Australian Workers' Union estimated that $5 million would cover workers until a sale is finalized. Assistant National Secretary Chris Donovan stated the smelter remains a profitable business "in the right hands."
- Workers: Employee Ben Manion described the three-week payment as "better than nothing" but expressed concern about long-term job security.
- Local Industry: Bell Bay Advanced Manufacturing Zone CEO Susie Bower reported that Liberty Bell Bay owes at least five local businesses a collective $1.3 million, causing significant financial difficulty for suppliers.
Broader Context
Liberty Bell Bay is among several GFG Alliance entities in Australia facing financial or regulatory actions, including the Whyalla steelworks in South Australia and the Tahmoor coal mine in New South Wales, which are under external administration.
GFG Alliance has stated it has entered a memorandum of understanding with Steel International Trading Company (SITC) for a potential lease arrangement to operate the smelter for up to five years.