Liberty Bell Bay may have been insolvent for more than a year before closing

Administrators for Liberty Bell Bay, Australia's only manganese smelter, have concluded that the company was likely insolvent for over a year before its closure last week. The voluntary administrators' report indicates that the company, part of GFG Alliance, may have been unable to meet its financial obligations since May 2025.

The smelter, located in northern Tasmania, entered administration in March and ceased operations recently, resulting in the loss of jobs for around 200 employees. The report from EY Parthenon highlights that the company's financial situation deteriorated significantly, with yearly revenue plummeting from $172 million in the 2024-25 financial year to just $11 million in 2026. Consistent operating losses since the 2022-23 financial year and a sharp increase in aged payables also contributed to the assessment of insolvency.

Adding to the concerns, the Tasmanian government provided a $20 million loan to Liberty Bell Bay in August 2025, a period when the company is believed to have already been insolvent. A significant portion of this loan, $14 million, was used to purchase a single shipment of ore. The administrators estimate that Liberty Bell Bay owes creditors between $70 million and $300 million, including substantial amounts for employee entitlements such as superannuation, annual leave, long service leave, and redundancy pay.

Further complicating matters, the report confirmed that GFG Alliance had transferred approximately $200 million out of Liberty Bell Bay through inter-company loans, leaving the smelter with limited cash resources to navigate supply chain issues and fluctuating commodity prices. A creditors meeting is scheduled for August 3, where a decision will be made regarding the company's potential liquidation and the appointment of a liquidator.