Wages for workers at the Liberty Bell Bay Smelter have been secured for the next three weeks, in a deal reached between the Tasmanian and federal governments.
Australia’s last ferromanganese smelter, at Bell Bay in Northern Tasmania, was put into administration on March 23 this year, and a search for a new buyer continues.
Union members from Liberty Bell Bay meet with union representatives outside the smelter to call on state and federal support with only one more guaranteed paycheck next Friday. (ABC News: Kelsey Reid)
Last week, the near 200 strong workforce had been told to take unpaid leave from this Friday, or lose their jobs.
Leave without pay, or lose your job — decision day for smelter workers
Federal Industry Minister Tim Ayres visited the site with Premier Jeremy Rockliff this morning to announce a deal had been reached to provide the surety for three weeks of workers’ wages.
The loan, worth $3 million, will be split evenly between the two governments.Â
Premier Jeremy Rockliff said, “We need to give the sale process the best possible chance.”
Administrators from Ernst & Young have indicated there are a dozen potential buyers for Liberty Bell Bay, and say a sale could take two to six months.
Local industry groups and unions say the smelter remains a profitable business in “the right hands”, but that retaining the highly skilled workforce remains key to a deal.
The Australian Workers’ Union national assistant secretary Chris Donovan said the weekly wage bill for the site was about $1.6 million.
Deal reached as deadline for workers gets pushed back
Union members from Liberty Bell Bay meet with union representatives outside the smelter to call on state and federal support with only one more guaranteed paycheck next Friday. (ABC News: Kelsey Reid)
Workers were originally told they needed to decide if they would leave their jobs by 5pm on Tuesday.
However, with the state and federal governments nearing a deal, that deadline was extended until Thursday.
Asked why a deal had taken so long, Senator Ayres said the smelter entering administration was an “extraordinary development”, and that there were “uncertain circumstances”.
“Nobody has been sitting on their hands here — everybody has been focused on achieving the right outcome for this community,” he said.
Mr Rockliff did not close the door on further support in three weeks if a buyer was not found.
“We’ll continue communicating with the administrator and the workforce — we’ve demonstrated today that we’re in their corner,” he said.Troubled period for smelter
Liberty Bell Bay is Australia’s last producer of ferromanganese alloy, which is used to strengthen steel.
Liberty Bell Bay enters voluntary administration
Today’s announcement follows an extended period of uncertainty under the ownership of British businessman Sanjeev Gupta and his company GFG Alliance, which purchased the smelter in 2019.
It has been in care and maintenance mode since last May, with GFG Alliance citing issues with iron ore supply and uncertain market conditions.
Last year, the state government lent GFG Alliance $20 million to purchase iron ore, which has sat unused at the Bell Bay site.
Incoming government briefings obtained by the ABC show that GFG Alliance has moved about $200 million out of Liberty Bell Bay to related parties via inter-company loans and paid a cash dividend to the UK parent company in 2022.
The Australian Securities and Investments Commission (ASIC) has filed action in the New South Wales Supreme Court to wind up Liberty Bell Bay, alleging it failed to lodge annual reports for the financial years ending in 2021, 2022, 2023 and 2024.
Contractors to the site are also believed to be owed millions of dollars.
Liberty Bell Bay is Australia’s only remaining ferromanganese smelter. (GFG Alliance)
Mr Rockliff said the “owners have let us down, big time”.
“That’s an absolute understatement,” he said.
“They’ve deserted the community and deserted the workforce, and showed absolute disrespect for Tasmania, for Northern Tasmania and the workers.”
Mr Ayres agreed with the criticism.
“The person who is squarely responsible for all of those debts that have been incurred, for letting down this community, is the bloke who ran GFG,” he said.