Northern Iron owed creditors $55 million when it collapsed
A Territory miner left tens-of-millions of dollars in debts when it shut its door last month. Read who’s owed what.
Northern Territory
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Territory miner Northern Iron left debts of more than $55 million when it was placed in voluntary administration in April.
And creditors could wait until the end of the year before settlement after the federal court granted receivers a six-month extension to push through a sale.
Mining services company Cargill is Northern Iron’s biggest creditor, with a secured debt of about $32.8 million from an offtake agreement entered into on August 10, 2023.
Northern Iron has 62 unsecured creditors and 11 unsecured creditors with personal property securities registrations.
Its six employees were supported by 75 contract staff.
Employees were owed about $30,000 in unpaid leave entitlements, excluding potential retrenchments following a redundancy process.
Creditors will push for a deed of company arrangement (DOCA), to eke out maximum advantage for stakeholders caught up in the collapse.
Documents tabled with the Federal Court showed a deed of company arrangement would maximise the sale proceeds and provide the best opportunity for secured creditors to be paid out, with surplus funds distributed to unsecured creditors.
Hayden White and Daniel Woodhouse of FTI Consulting were appointed Northern Iron’s joint receivers by Cargill, with Mr White supporting the six-month extension.
Darwin-based Rogers Reidy are administrators.
“Having regard for the size and scale of the company’s operations and the number of creditors and other stakeholders involved, the sale process will take some time and the extension is sought in order to facilitate that process,” the document said.
Receivers have been in control of Northern Iron’s assets since April and have managed its day-to-day operations, including continuing the operational stand down and overseeing the sale of existing product.
“They have taken the usual steps of travelling to site; engaging with employees and staff; have retained contractors to continue work as required; and have engaged with creditors, suppliers and major financial institutions,” it said.
Receivers have issued flyers and investment process letters to more than 170 potentially interested parties.
Operations have not “substantively” recommenced since administration, although some contractors and employees have been retained.
Established in 2021, privately owned Northern Iron has been developing the Warrego Rehabilitation Project, located 50km northwest of Tennant Creek.
The rehabilitation process produces high grade magnetite concentrate from a low-grade iron ore stockpile from historic mine by-product at the old Warrego mine.
Mining at the site began in the late 1950s and wrapped-up in 1989, producing 4.9 million tonnes of ore.
In January, Northern Iron dispatched its first shipment of 47,000 tonnes of so-called Northern Australia Magnetite Concentrate to Asian markets.
The project had an expected mine life of three-and-a-half years, during which it was hoped the resource would contribute about $100m a year to the NT economy and produce about 3.8 million tonnes of magnetite for global markets.
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Originally published as Northern Iron owed creditors $55 million when it collapsed
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