Liberty Bell Bay will close and about 250 workers will lose their jobs, after a deal to buy the northern Tasmanian smelter fell through this week.
Administrators Ernst and Young broke the news to staff at a town-hall meeting on the George Town site this morning.
The plant is Australia’s only producer of manganese alloy, a key ingredient in steelmaking.
The smelter was placed into administration in March. In May the administrators announced a consortium had agreed to buy the business.
One of the consortium’s main financial backers pulled out last month, leaving the sale in doubt. It fell through this week.
On Tuesday the consortium told the administrators it had stopped pursuing the sale.
The administrators said the buyer walked away because of problems with the arrangements needed to run the smelter.
“These difficulties were, in part, driven by the broader economic challenges associated with operating the smelter in a volatile global economy,” EY said in a statement.
While the talks were underway, the state and federal governments covered workers’ wages while the consortium funded the wider running costs.
With no viable sale and no money left to keep operating, the administrators decided to begin winding the business down straight away.
“In the absence of both a commercially viable transaction and the funding required to continue operations, the administrators have made the difficult decision to commence the orderly closure of the business with immediate effect,” the statement said.
Administrator Morgan Kelly said all sides had worked hard to save the plant and keep people in work.
“This is an incredibly disappointing outcome for employees, their families and the wider Bell Bay community,” Kelly said.
“Over the past several weeks, all parties worked diligently to pursue a transaction that would preserve the smelter and secure ongoing employment.”
“However, the difficulties with key enabling arrangements means there is no viable pathway to complete the proposed transaction or pursue an alternate transaction.”
Employees will be updated about redundancies next week.
“Employees are being provided with all support available during this difficult period,” the statement said.
In the short term a small workforce will stay on to safely demobilise the site, sell off remaining assets and meet the company’s environmental and regulatory obligations.
