Tasmanians could soon own 12% of King Island’s Dolphin Tungsten Mine, as part of a recapitalisation plan aimed at saving the struggling operation from going into administration.
The scheelite mine produces tungsten, a critical metal used in everything from high-tech manufacturing to defence applications.
Group 6 Metals has unveiled a sweeping debt-to-equity swap that would convert more than $81 million in debt into shares, including $10 million owed to the Tasmanian Government.
If approved, the move would reduce existing shareholders’ stake to just 4.6%, but could secure the mine’s long-term future, according to documents released ahead of a shareholder vote.
“Following extensive negotiations with lenders … recapitalisation emerged as the best and only viable option to preserve residual value for the company and its stakeholders,” a notice of meeting reads.
The new ownership structure would see the state government joined by three major players: Abex Limited (up to 28.3%), the Ellis Entities (up to 28.9%) and Elphinstone Group (up to 23.2%).
Group 6 Metals has warned that if the proposal is rejected, the company will likely be forced into administration.
Shareholders are set to vote on the plan at a general meeting scheduled for April 23.
The mine re-opened in 2023 after sitting idle for 30 years, thanks to a $10 million loan from the state government to support redevelopment.
Mining first began at the site in 1917 and continued sporadically until 1990. It was rehabilitated and closed in 1992, after years of low tungsten prices.
