An internal document shows the Tasmanian government was advised in July 2025 that every risk category for a $20 million loan to Liberty Bell Bay was rated as high, ABC News reported. The document, obtained under right-to-information and authored by Tasmania's coordinator-general John Perry, warned that security held against the loan carried a high risk of falling short of the full outstanding amount.
The document warned the smelter faced capital exhaustion before the end of July and rated the probability of being unable to restart without urgent funding as very high, leading to a recommendation for a loan of up to $20 million. Under a do-nothing option, the document estimated the smelter's closure would cost the state economy $500 million a year if it never reopened. The White Oak sale option was rated as exceeding what was needed and as failing to deliver good value for Tasmanian taxpayers, while taking control of the business was assessed as likely to be unacceptable to GFG.
Resources Minister Felix Ellis said the documents, once released, showed the advice received was that the dangers of inaction outweighed the risks that were present. He said the loan was secured and payments went straight to the ore supplier, and that state-appointed receivers are working to recover funds through the secured ore, with how much can ultimately be recouped depending on the sale result. Tasmanian Labor MP and Shadow Treasurer Dean Winter said the loan effectively put $20 million of taxpayer money into Sanjeev Gupta's enterprise for ore purchases, and expressed serious doubt that the funds would be recovered, arguing that adequate checks and balances had not been applied.
After receiving the $20 million loan, GFG committed to restarting operations, but the facility stayed in limited operations until the administration process commenced. More than 200 jobs were lost when Liberty Bell Bay shut in July this year and was subsequently placed into administration.
The Tasmanian government appointed receivers and managers in January to protect the ore stockpile after accusing the company of breaching loan arrangements, following the failure of operations to restart. Australia's national corporate regulator filed legal proceedings in May seeking to wind up Liberty Bell Bay, citing its failure to lodge tax returns.
The Tasmanian and Commonwealth governments agreed to provide Liberty Bell Bay with a $3 million loan split equally between them, to support workers while administrator EY runs a sale of the facility, the Prime Minister's office said in a statement. The smelter is Australia's only domestic producer of manganese alloy, which is used in steelmaking for defence, construction and mining. EY, the smelter's administrator, has reported approximately a dozen parties expressing interest in buying the facility.
Workers at Liberty Bell Bay will receive wage support through the $3 million joint government loan while the sale proceeds, but Premier Rockliff gave no assurance that support would continue beyond three weeks if the sale process took longer than expected. The Tasmanian government's ability to recover the $20 million loan depends on the outcome of the ore sale being conducted by state-appointed receivers, and the final amount recoverable remains uncertain.
Official statements: Prime Minister of Australia
Written by Pick & Scroll News from the reporting and documents linked above.
