A New South Wales Supreme Court judge has acknowledged the serious impact job losses would have on workers, their families and the local community, while ordering a coal mine owned by Sanjeev Gupta into liquidation.
Justice Ashley Black this afternoon ordered Tahmoor Coal, south-west of Sydney, to be wound up in insolvency, after more than a year of delays and voluntary administration.
The mine has been non-operational for more than 12 months, leaving about 500 workers stood down and raising a series of questions about the related-party loans within Mr Gupta’s GFG business empire.
A winding up application against Tahmoor Coal has been approved by the NSW Supreme Court. (ABC Illawarra: Brooke Chandler)
Justice Black acknowledged the human impact, saying he was aware of “the real and substantial personal hardship to employees, their families and the local community of a significant displacement of the workforce.”
The winding up application was launched by Coal Mines Insurance (CMI) in August as the insurance provider sought about $4.5 million in unpaid premiums.
In November Mr Gupta’s GFG Alliance placed the mine’s holding company, Liberty Primary Metals Australia (LPMA), into voluntary administration.
Around the same time, 250 of the mine’s contract workers stopped receiving pay, with contractor RStar attempting to rescue operations.
Last month, as CMI pressed for liquidation, GFG placed the mine into voluntary administration in a bid to avoid winding up.
The winding up application returned to court yesterday, where CMI continued to push for liquidation and explained the move would lead to the immediate loss of 238 jobs.
It said 50 staff would be retained in care and maintenance.
At the hearing, newly appointed administrator Joseph Hayes sought a further three-week adjournment, saying extra time might help secure alternative funding after a $40 million commitment from Clydesdale — another Gupta-owned company — to run the administration remained uncertain.
Mr Hayes noted the 2024 accounts suggested the facility might be worth only $5 million and admitted he had no visibility of 2025 accounts or how other GFG entities would provide funding.
Tahmoor Colliery has been non-operational for more than 12 months. (ABC Illawarra: Brooke Chandler)
Debt investigations
Christopher Withers SC, appearing for CMI, highlighted the unusually high level of related-party debt — around $250 million of $432 million in total claims.
He also argued that liquidation would provide stronger powers to investigate loans and security arrangements entered into while the company was insolvent.
The Mining and Energy Union (MEU) provided a statement to court in support of the voluntary administration to try to save jobs.
The NSW government reminded the applicant and administrator that it held a charge over the Tahmoor mining lease to recover unpaid royalties and could appoint a receiver to protect its interests.
The government is owed about $30 million in unpaid royalties.
‘Most difficult decision’
This afternoon, Justice Black said it was the most difficult case he had considered in his 15 years on the court.
“I’m conscious of and troubled by the impact on employees of not adjourning the winding up to not allow the voluntary administration to continue.”
He also said the liquidator would have the power to conduct investigations into some of the “significant transactions” behind the mine’s financial collapse.Â
Justice Ashley Black says he is aware of the impact his decision will have on the Tahmoor community. (ABC Illawarra: Brooke Chandler)
Justice Black appointed Shaun Fraser and Jonathan Henry as the liquidators and ordered the plaintiff’s costs, including reserved costs, were costs in the winding up.
In a statement the MEU said it was disappointed by the outcome.
“We fear for our members and the employees at Tahmoor Colliery,” the statement read.
“We are seeking as an immediate meeting with CMI administrators or Coal Services administrators so that we can sit down and talk [about] the best outcome for our members and the employers at Tahmoor Colliery.”
In a statement, a GFG Alliance spokesperson said the operation acknowledged the decision of the court.
“Had the voluntary administration continued, the administrators would have progressed their ongoing work, including advancing the expeditious sale of Tahmoor Colliery.
“In our view, a sale conducted through the voluntary administration would have provided the best opportunity to maximise value for stakeholders while maintaining continuity for employees during the process.”
They said the company would cooperate with the liquidators.