A shocking financial crisis has unfolded, leaving a trail of unanswered questions and an uncertain future for a once-thriving coal mine. The Tahmoor coal mine, a vital part of New South Wales' economy, now faces an uncertain future due to a complex web of financial entanglements.
Administrators have stepped in to navigate the intricate web of debts and liabilities, totaling over $100 million, that have engulfed the mine's holding company. But here's where it gets controversial: the mine, which had been profitable, was forced to close its doors, leaving workers and contractors in the lurch.
The mine's closure in February was a direct result of the financial turmoil surrounding its owner, British billionaire Sanjeev Gupta, and his GFG Alliance. About 500 workers were initially stood down with pay, but half of them, the contractors, were later informed they would no longer be paid. It's a stark reminder of the human cost of corporate financial woes.
On Monday, the mine's parent company, Liberty Primary Metals Australia (LPMA), was placed into voluntary administration. William Buck was appointed as the administrator, tasked with untangling the complex financial affairs of LPMA, which also oversees the Liberty Bell Bay smelter in Tasmania and OneSteel Manufacturing (OSM) in Whyalla.
The South Australian government had previously forced OSM into administration in February, highlighting the far-reaching impact of the financial troubles. GFG Alliance defended its decision to place LPMA into administration, citing an attempt to restructure in response to the financial problems with its operations in SA.
However, recently filed documents with the corporate regulator have revealed a complicated financing scheme within the GFG Alliance consortium. Significant funds were diverted from the profitable Tahmoor Colliery to support struggling parts of the business, including the Whyalla steelworks. This diversion of funds led to a significant drop in the mine's value, with total equity dropping by over 40% in just over a year.
And this is the part most people miss: despite turning a profit of $85.7 million in 2024, Tahmoor Coal's annual report revealed a complex financial arrangement. The mine loaned $354.8 million to OSM, the steelworks operator, which was later transferred as a $427 million dividend to Tahmoor's sole shareholder, LPMA. This deal, finalized six months prior to the mine's closure, left Tahmoor unable to pay for critical operational supplies.
GFG Alliance admitted to using Tahmoor to provide over $98.6 million in support to the Whyalla steelworks between July 2024 and February 2025. Efforts to separate and refinance Tahmoor were delayed until August 2025 due to a disputed security with Greensill UK.
To keep the business afloat, Tahmoor has cobbled together emergency funding, proposing further refinancing, loan tranches, and cash injections. However, the timeline is tight, and Tahmoor's auditor, KPMG, has cast doubt on the realism of these plans. KPMG issued a scathing disclaimer, stating it could not verify the company's financial assumptions, including the timing of external funding and the restart of operations.
The financial troubles have also impacted the payment of royalties and invoices. In August, Tahmoor was contacted by the NSW government regarding $29.4 million in unpaid royalties. The minister imposed a charge on all Tahmoor's mining leases in September. Coal Mines Insurance Pty Ltd (CMI), which manages the coal industry workers' compensation fund, is owed $4.7 million, and has taken Tahmoor to the NSW Supreme Court to wind up the company.
Creditors, including contractors and suppliers, are also chasing more than $17 million in unpaid invoices and have joined the legal action. At the time of the report's filing, there were approximately $100 million in debts due, with directors estimating the company would need to raise $244 million to fund operations until the end of 2026.
The human impact of this financial crisis is profound. Since operations were suspended, GFG Alliance claims to have injected $4-5 million a week into Tahmoor, totaling $60.4 million. However, last week, the mine's main contractor, RStar, stood down about 250 workers when GFG defaulted on payments. This prompted local federal MP Angus Taylor to call for an "orderly exit" if the mine cannot be restarted.
In a correspondence seen by the ABC, Mr. Gupta assured Mr. Taylor that he had provided RStar with $5.4 million and attributed payment delays partially to the "Diwali holidays in India." He also stated that the pay for permanent employees had not been affected and expressed openness to financing, joint-venture partnerships, or sale options, though preliminary discussions with potential buyers have yet to yield results.
LPMA administrator William Buck expressed reasonable confidence in reaching a positive outcome aligned with stakeholders' interests. However, the future of the Tahmoor coal mine remains uncertain, leaving workers and contractors caught in the middle of a complex financial web.
