Tasmania seizes $15m of ore from Gupta plant after loan breaches

Tasmania has appointed Deloitte as receiver and manager of a $15 million stockpile of manganese ore at the mothballed Liberty Bell Bay smelter, after the Sanjeev Gupta-led company that owns it breached the terms of a loan deal with the state government.
The ore has been sitting idle at the smelter since being delivered in October after the Tasmanian government advanced a $20 million loan in August to buy 48,000 tonnes of ore to facilitate a restart of the plant.
One of the conditions tied to the loan was a resumption by September 30, but the plant remains shuttered, having first suspended operations in May.
Tasmanian minister for business and industry Felix Ellis said on Thursday that Deloitte had been appointed to manage the ore stockpile and protect taxpayer funds. He emphasised that the Liberty Bell Bay operations were not subject to the receivership, only the ore.
“It’s a strong protection for the taxpayer, we provided the loan on the basis of the smelter getting up and running. They failed to do that,” Ellis said.
“Unfortunately, GFG has not delivered on its promises to Tasmanians and to its workers to restart operations, and the loan has not been repaid,” Ellis said.
The move partially mirrors action taken by the South Australia government last February, when premier Peter Malinauskas forced Gupta’s Whyalla steelworks into administration after becoming frustrated over months of unpaid bills as Gupta’s GFG empire faltered globally.
The Whyalla steelworks is now up for sale, in a process being managed by adminstrator KordaMentha, with takeover target BlueScope leading a consortium as a potential buyer.
Ellis said the value of the ore was around $14.5 million, and it would be shifted to a nearby site owned by the government.
GFG said on Thursday the appointment of receivers did not prevent the company from pursuing a deal with an export company based in Georgia, formerly part of the Soviet Union. GFG announced late last year it was in talks with Steel International Trading Company over a potential five-year lease deal where the Georgian group would run the smelter.
“This appointment relates to the ore only and does not limit the current options being pursued to protect the future of the Liberty Bell Bay as the State Government has made clear,” GFG said in a statement.
“Liberty Bell Bay continues to progress negotiations and due diligence with Steel International Trading Company and has supported engagement with the Tasmanian government”.
GFG said the involvement of SITC represented the best path forward despite deteriorating global market conditions.
Another Gupta business, the mothballed Tahmoor coking coal mine in NSW , is also up for sale. Liberty Primary Metals Australia, which owns all the shares in the NSW mine and is the principal holding entity for GFG Alliance’s Australian steel and mining businesses, was placed into voluntary administration in November, with William Buck appointed. A deed of company arrangement proposal paved the way for the sale process to start.