Hundreds of workers at Australia’s only manganese alloy smelter, which is under administration, have been given short-term pay assurances that unions say do nothing to address long-term security concerns.
The federal and Tasmanian government’s 50-50 loan of up to $3 million was announced on Wednesday and will cover the entirety of the facility’s 200-strong workforce.
It comes about a week after administrators told some 175 workers they would soon need to either take leave without pay or face redundancy.
The Liberty Bell Bay smelter in northern Tasmania has been sitting idle since May when it paused operations, citing ore supply issues and global price volatility.
The smelter, which was a subsidiary of GFG Alliance owned by controversial businessman Sanjeev Gupta, went into administration in March.
Federal Industry Minister Tim Ayres said the $3 million of new support was a good step, and governments were working to support a transition to a new owner.
Administrators Ernst and Young have indicated there are a dozen potential buyers for the smelter, which produces an alloy to strengthen steel.
Mr Ayres indicated it wasn’t viable for the federal government to provide support when the smelter was in the hands of GFG Alliance.
“What has happened here is the owner of this facility has run it down,” he told reporters.
“This is an efficient facility … with markets and customers that want to buy its products.”
Tasmanian Premier Jeremy Rockliff didn’t guarantee support for workers if the sale process dragged on beyond three weeks.
GFG Alliance had deserted and disrespected the community and its workforce, he said.
Smelter workers recently held a rally, calling for state and federal government intervention.
Australian Workers Union assistant 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 its workforce in place to be sold, and that process is likely to require months, not weeks.”
In August, the Tasmanian government loaned Liberty Bell Bay $20 million to purchase ore with the goal of resuming operations.
When operations didn’t restart, the government in January appointed receivers and managers to protect the ore stockpile, accusing the company of breaching loan arrangements.
In May, the national corporate regulator lodged legal action to try to wind up Liberty Bell Bay over a failure to lodge tax returns.
GFG Alliance in November said it had signed a memorandum of understanding with a Georgian company to operate the smelter for up to five years.
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