Overview: A high-stakes restart hangs on conditions
The Tasmanian government has formally warned GFG Alliance that it has not met the conditions attached to a $20 million loan intended to guarantee a steady ore supply for Liberty Bell Bay, the state’s only manganese alloy smelter. Located in the north of Tasmania, the facility has been operating in a limited capacity since May, casting doubt over the future of about 250 jobs.
The loan, approved in August and backed by the Tasmanian Development Board, was designed to secure a 23,000-tonne shipment of manganese ore crucial to restarting full operations. Although the ore arrived last week, there has been no restart announced by Liberty Bell Bay, prompting government concerns about adherence to the loan’s conditions.
What the government says
Industry and Resources Minister Felix Ellis emphasized that the loan came with “clear, enforceable conditions.” He said the government has written to the company placing it on notice for not meeting those terms. “The state holds security over the asset but our confidence in GFG’s ability to meet its obligations has been severely undermined by its failure to restart operations,” Ellis stated. The government has not ruled out options to protect Tasmanian workers and the future of the Bell Bay operation.
The restart deadline and current status
A key condition required GFG to take all steps to resume production by the end of September. A Liberty Bell Bay spokesperson indicated that unloading and preparatory work were underway after the ore shipment, but the broader restart remains pending. The company cited ongoing challenges with ore supply due to a cyclone and, more recently, a collapse in ferroalloy prices in the U.S. market as factors that shifted its thinking toward first securing clarity on supply before a restart.
Market conditions and strategic considerations
Liberty Bell Bay argues that sudden market shifts—specifically a sharp drop in highcarbon ferro manganese prices—necessitate a cautious approach. The company noted that prices have fallen more than 13% in the U.S. since June, with a 9% drop in the last week, complicating decisions about restarting production. A team from Liberty Bell Bay plans to meet U.S. customers to assess demand as part of its risk mitigation strategy.
GFG Alliance finances and broader implications
GFG Alliance has faced financial challenges across its network, including concerns highlighted in the Whyalla operations in South Australia. An administrators’ report for Whyalla Ports estimated Liberty Bell Bay’s capital deficiency at $121.4 million (as of June 30), with a net loss of $80.3 million. The report also notes the need for additional capital facilities to sustain operations and the potential rehabilitation cost if the smelter closes.
Australian authorities have received advice from Deloitte indicating that Liberty Bell Bay would likely need private or government capital assistance beyond the existing loan. There is also scrutiny over inter-company movements, with claims that GFG moved about $200 million out of Liberty Bell Bay to related parties and paid a dividend to its UK parent in 2022. GFG has disputed the attribution of the problems solely to ore supply or soft markets.
Impact on local jobs and the supply chain
The government estimates that Liberty Bell Bay supports about 400 indirect jobs, including workers at related sites such as the Beams Brothers quarry in Flowery Gully, which supplies limestone, dolomite and iron ore. Local stakeholders warn that delays in restarting the smelter could reverberate through the region’s economy and the broader supply chain for manganese and related materials.
What happens next?
With the government maintaining a position of security over the asset, administrators and industry observers will watch closely to see whether GFG can satisfy the loan conditions and restart the plant. The situation also sits against a backdrop of broader financial pressures on GFG’s portfolio and ongoing debates about capital support for struggling heavy industry in Australia. The Tasmanian government has not ruled out options to protect workers and the Bell Bay operation, signaling that the outcome remains uncertain and closely tied to the company’s ability to meet its financial commitments and resume production.
