Thalanga likely to be sold after collapse of mine

A troubled North Queensland mine has debts running into millions of dollars, it can now be revealed, as 130 employees lose their jobs.

The troubled Thalanga zinc, copper and lead mine near Charters Towers could be put up for sale to pay off debts running into millions of dollars.

Meanwhile, most of its more than 130 employees and contractors have lost their jobs.

The owner of the mine, Cromarty Resources, was placed in voluntary administration last week amid ongoing production difficulties caused when the roof of a stope in the underground mine caved in.

The parent company to Cromarty, Red River Resources, has told the stock exchange an operator received a precautionary medical examination but had been discharged with no serious injuries.

Charters Towers Mayor Frank Beveridge said he felt for the workers but was confident they would find employment quickly because of the shortage of labour at other mine sites.

“We feel sorry for all the miners laid off right before Christmas. But now is a very good time to be looking for a job in Charters Towers,” Cr Beveridge said.

The Thalanga Zinc Project west of Charters Towers.

A spokesman for Melbourne-based FTI Consulting appointed to Cromarty said they determined the most appropriate action was to move operations into care and maintenance.

“Unfortunately, as a result of the move to care and maintenance the majority of direct employees will be let go and impacted staff have now been informed,” the spokesman said.

“One of the first actions we will undertake is a review of options for the mine going forward. It is likely this will include considering a sale process.”

Metarock Group subsidiary PYBAR Mining Services was contracted to provide mining services to the mine.

Stockpiles of zinc and lead concentrate at Thalanga Mine, west of Charters Towers.

In a statement to the stock exchange, Metarock said amounts owing to Metarock under the contract totalled about $5.7m in debtors and work in progress.

“PYBAR has also incurred approximately $1.5m of costs in relation to latent condition works performed and to be claimed.”

Metarock said PYBAR had taken immediate steps to scale down the workforce and remove equipment from site.

According to Red River, the appointment of administrators followed operational issues and concerns that reduced production and increasing costs meant Cromarty may become insolvent.

Mining had been re-established after a “fall in ground” event in August but additional ground support and technical work had impacted mining.

Red River acquired the Thalanga operations from the liquidators of the failed Kagara Ltd in 2014 for $6.5m. The area has supported a mine with several operators since 1989.

Originally published as Thalanga likely to be sold after collapse of mine