Smelter’s wage lifeline fails to allay viability fears
Hundreds of workers at Australia’s only managed manganese alloy smelter have been given short-term wage guarantees that unions say will do nothing to address long-term safety concerns.
The 50-50 federal and Tasmanian government loan of up to $3 million was announced on Wednesday and will cover the facility’s entire 200-strong workforce.
This comes about a week after managers told about 175 workers that they would soon have to go on unpaid leave or face layoffs.
The Liberty Bell Bay smelter in northern Tasmania has been idle since May, when it paused operations due to ore supply problems and global price fluctuations.
The smelter, a subsidiary of GFG Alliance owned by controversial businessman Sanjeev Gupta, went into administration in March.
Federal Industry Minister Tim Ayres said the new $3 million support was a good step and the government was working to support the transition to a new owner.
Executives Ernst and Young said there are a dozen potential buyers for the smelter, which produces alloys to strengthen steel.
Mr Ayres said it was inappropriate for the federal government to provide support while the smelter was in the hands of GFG Alliance.
“What happened here was that the owner of this facility was running this place,” he told reporters.
“This is an efficient facility with markets and customers who want to buy its products.”
Tasmanian Premier Jeremy Rockliff has not guaranteed workers support if the sale process takes longer than three weeks.
He said GFG Alliance had abandoned and disrespected the community and its workforce.
Foundry workers recently held a rally calling for state and federal government intervention.
Australian Trades Union Deputy National Secretary Chris Donovan said the funding was welcome.
“It keeps food on the table and a roof over the heads of hundreds of working families,” he said.
“But let’s be clear: This is a short-term lifeline, not a long-term solution. This site needs labor to be sold, and that process will likely take months, not weeks.”
In August, the Tasmanian government loaned Liberty Bell Bay $20 million to purchase ore to continue operations.
When operations did not restart, the government appointed trustees and administrators in January to protect the ore stockpile and accused the company of violating credit regulations.
In May, the national corporate regulator took legal action to try to shut down Liberty Bell Bay over non-filing of tax returns.
GFG Alliance announced in November that it had signed a memorandum of understanding with a Georgian company to operate the smelter for up to five years.
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