A WA mining services company which counts Mineral Resources as a major shareholder has gone into voluntary administration.
The Australian Securities Exchange suspended trading in shares of Resource Development Group – which counts Australian Garnet among its subsidiaries – on Monday after administrators from McGrathNicol were appointed.
McGrathNicol partners Jason Ireland, Rob Brauer and Linda Smith will oversee the company and its entities, which also includes manganese play Mn Battery Minerals, which aimed to produce the high-purity ingredients needed for electric vehicle battery manufacturing.
In a statement, McGrathNicol said it intended to continue “business as usual” while a sale or recapitalisation process was under way, including at Australian Garnet’s Lucky Bay operations.
“Lucky Bay is an important operation in WA’s mid-west which provides premium grade garnet to a range of international customers,” Ireland said.
“It will continue to operate as usual while we work to determine the long-term future of the facility.”
The administrators were in discussions with Mineral Resources regarding funding support, which Brauer said would “comfort and provide certainty to the continuation of operations and the position of employees”.
In a statement, Mineral Resources said it had reviewed its arrangements from RDG, which included a cash advance against existing loan arrangements, which the MinRes board determined not to provide.
Mineral Resources nominees on the RDG board were excluded from the review process and decision, the statement said. The company has offered to provide the administrators with funding up to the date of the second meeting of RDG creditors.