More than 200 workers in northern Tasmania have lost their jobs after the closure of Australia’s only manganese smelter, with administrators alleging its owner transferred almost $191 million out of the business before it collapsed.

The Liberty Bell Bay manganese smelter, located near George Town in northern Tasmania, officially ceased operations after entering voluntary administration earlier this year. The closure resulted in the loss of 214 jobs and ended more than six decades of domestic manganese alloy production, leaving Australia without a commercial manganese smelting facility.

An investigation by voluntary administrators EY Parthenon has now revealed allegations that the facility’s financial position deteriorated dramatically after approximately $191 million was loaned from Liberty Bell Bay to other companies within businessman Sanjeev Gupta’s global GFG Alliance.

According to the administrators’ report, the smelter generated a net profit after tax of approximately $56 million during the 2022–23 financial year. However, its financial position subsequently deteriorated, recording cumulative losses of around $160 million over the following years while its working capital fell sharply from about $153 million in FY22 to just $9 million by 2026.

The report states that intercompany loans were made to multiple businesses within the wider GFG Alliance following its acquisition of the Bell Bay facility from South32 in January 2021.

Administrators have alleged those transactions significantly weakened the Tasmanian operation and concluded that, had those funds remained within the business, the smelter may have continued operating profitably.

One of the most significant findings concerns the company’s financial status before government assistance was provided.

EY Parthenon believes Liberty Bell Bay may have been insolvent from as early as May 2025, several months before the Tasmanian Government approved a $20 million taxpayer-funded loan intended to keep operations running. Administrators reported that around $14 million of that funding was used to purchase a single shipment of approximately 23,000 tonnes of manganese ore, which was ultimately never processed after the smelter shut down.

Deputy Premier Guy Barnett described the findings as deeply concerning, saying both the Tasmanian and federal governments had made substantial efforts to preserve the facility and protect local employment.

He said government due diligence had focused on securing the ore purchased with taxpayer funding to protect public money should the business fail.

The administrators estimate Liberty Bell Bay owes creditors somewhere between $70 million and $300 million. Employee entitlements alone are estimated at approximately $27 million, highlighting the financial impact on hundreds of workers and their families.

The report also raises broader corporate governance concerns.

Administrators say they are examining potential uncommercial transactions, possible breaches of directors’ duties and other payments made before the collapse. Creditors are expected to determine whether the company should move into liquidation at an upcoming meeting, where further investigations could be authorised. >

Liberty Bell Bay occupies a unique position within Australia’s industrial sector.

Originally established in the early 1960s, the plant was Australia’s only commercial producer of ferromanganese and silicomanganese—critical inputs used in steel manufacturing and other heavy industries. Its closure means Australian steelmakers must now rely entirely on imported manganese alloys, raising questions about sovereign manufacturing capability and supply-chain resilience.

The smelter’s difficulties did not emerge overnight.

Production had already been disrupted by shortages of manganese ore after Tropical Cyclone Megan damaged infrastructure at South32’s GEMCO mining operation in the Northern Territory during 2024. Reduced raw material supplies forced Liberty Bell Bay into limited operations before financial pressures intensified further.

The Bell Bay collapse is also the latest challenge facing Sanjeev Gupta’s international metals empire.

GFG Alliance expanded rapidly over the past decade through acquisitions across Australia, Britain, Europe and North America. However, the group has faced mounting financial pressure since the collapse of Greensill Capital, one of its major financiers, while several operations in different countries have experienced funding difficulties, restructurings or insolvency proceedings. Gupta has also faced ongoing investigations in the United Kingdom relating to aspects of GFG Alliance’s financing arrangements, although he has denied wrongdoing.

Australia has already experienced major intervention involving another Gupta-controlled asset.

Earlier, the South Australian Government placed the Whyalla Steelworks into administration as part of a broader rescue effort designed to preserve one of Australia’s largest steel manufacturing operations, while making clear that public funding was intended to support workers and the business rather than bail out GFG Alliance itself.

The Bell Bay closure has renewed debate over the risks governments face when providing financial assistance to strategically important private manufacturers.

Supporters of intervention argue preserving critical industrial capability and regional employment sometimes justifies temporary taxpayer assistance. Critics, however, question whether governments had sufficient visibility over Liberty Bell Bay’s financial condition before extending public loans.

For northern Tasmania, the immediate concern is employment.

The loss of 214 skilled industrial jobs represents one of the region’s largest recent manufacturing setbacks. The Tasmanian Government has since announced retraining and transition programs aimed at helping former employees move into construction, manufacturing and other industries as the region adjusts to the closure.

Meanwhile, administrators continue investigating the company’s financial affairs as creditors prepare to decide the next stage of the insolvency process.

The findings are likely to remain under close scrutiny, not only because of the significant losses suffered by workers and creditors, but also because they raise wider questions about corporate accountability, public investment decisions and the future of Australia’s strategic manufacturing sector.