British Billionaire Pressed to Sell $350M Mothballed Mine
The Mining and Energy Union (MEU) is urging British billionaire Sanjeev Gupta to accept a $350 million offer for the Tahmoor coal mine in New South Wales. This mine has been inactive for one year, following financial difficulties experienced by its owner, GFG Alliance.
Concerns Over Mine Closure
The MEU has raised alarms that delays in the sale of the Tahmoor coal mine could lead to lasting damage to the operation and jeopardize hundreds of jobs. The mine, located southwest of Sydney, has not been operational since February 2022. It has run out of funds, largely due to the financial turmoil within GFG Alliance.
Offer on the Table
Last week, a consortium led by the mine’s primary contractor, RStar, extended a solid offer to Mr. Gupta to purchase the mine. Bob Timbs, the MEU South West District president, has confirmed that this bid would fully settle all debts and enable the mine to resume operations.
- The offer is for $350 million.
- It aims to pay all creditors in full, including state royalties.
- The consortium believes it has sufficient funds to restart the mine.
Job Impacts and Financial Struggles
Since the mine’s closure, approximately 500 workers, including contractors, have been paid minimum wages. By November 2022, many were informed their wages would cease entirely. Liberty Primary Metals Australia (LPMA), the mine’s parent company, was placed in administration in late 2022. A formal expression of interest for the mine commenced in January 2023.
Administrative Process for Sale
William Buck, the administrators, are currently overseeing the sale process for LPMA’s shares in the Tahmoor Coal Pty Ltd. They announced that expressions of interest would close on February 11, 2023, and have opened a data room with detailed information for interested buyers.
The GFG Alliance indicated that the ongoing administrative process is the only viable option for the sale of the Tahmoor coal mine. They have cautioned against considering speculative offers without proper funding, emphasizing that an unsupported liquidation would have catastrophic consequences.
Future Actions and Government Involvement
If the mine is not sold, the MEU intends to lobby creditors and the government to take action. Timbs has stated that after extensive efforts to facilitate a sale, they would advocate for the mine’s operation, regardless of the current owner’s stance. State Resources Minister Courtney Houssos has been approached for comments regarding the situation but previously resisted lifting a fixed charge on the mine’s leases.
Legal Issues
The Supreme Court is set to hear a case involving Coal Mines Insurance Pty Ltd, which has a claim against Tahmoor for $4.7 million. The company seeks to wind up the mine due to outstanding debts related to the coal industry’s workers’ compensation fund.
The implications of the mine’s future remain critical, as the MEU warns that continued inaction could endanger not only the mine but also the livelihoods it supports within the community.
