Imagine a profitable coal mine suddenly forced to shut down, leaving hundreds of workers in limbo and millions in debts unpaid. This is the shocking reality for the Tahmoor coal mine in New South Wales, Australia, where financial turmoil has spiraled out of control. But here's where it gets even more complicated: the mine's troubles are deeply intertwined with the struggles of its owner, British billionaire Sanjeev Gupta's GFG Alliance, a global conglomerate now facing a web of financial challenges.
Administrators have stepped in to take control of Liberty Primary Metals Australia (LPMA), the holding company for Tahmoor, after revelations of a staggering $30 million in unpaid royalties and over $100 million in outstanding debts. And this is the part most people miss: the mine itself was profitable, reporting an $85.7 million profit in 2024. So, how did it end up in such dire straits? The answer lies in a complex financial shuffle within the GFG Alliance, where funds from Tahmoor were diverted to prop up struggling parts of the business, like the Whyalla steelworks in South Australia.
In 2024, Tahmoor provided a $354.8 million loan to OneSteel Manufacturing (OSM), the operator of the Whyalla steelworks, which was later reclassified as a $427 million dividend to LPMA. This move significantly depleted Tahmoor's equity, dropping it by over 40% in just 15 months. Is this a case of corporate mismanagement or a desperate attempt to save a sinking ship? The debate is sure to spark controversy.
By February 2025, Tahmoor was forced to close, unable to pay for critical supplies. Meanwhile, contractors and suppliers are left chasing over $17 million in unpaid invoices, and even the NSW government is owed $29.4 million in royalties. Coal Mines Insurance Pty Ltd (CMI) has taken legal action to wind up the company, adding to the mounting pressure.
Workers have been caught in the crossfire. While GFG Alliance claims to have injected $60.4 million into Tahmoor since its closure, the mine's main contractor, RStar, recently stood down 250 workers due to missed payments. Sanjeev Gupta has cited delays caused by 'Diwali holidays in India' and remains open to financing, partnerships, or even a sale. But with auditors like KPMG warning that the company's financial plans may not be realistic, the future looks uncertain.
Here’s the burning question: Can Tahmoor be saved, or is this the end of the line for the mine and its workers? And what does this saga say about the broader challenges facing the global mining and steel industries? Share your thoughts in the comments—this is a story that demands discussion.
