Sanjeev Gupta raided Tahmoor colliery for $427m; RBA back in black but no gold lining

Sanjeev Gupta’s mothballed Tahmoor colliery in NSW.

Industrialist Sanjeev Gupta ripped $427m from the books of his Tahmoor colliery before the NSW mine was shut down, unable to pay its own bills to hundreds of small creditors.

The extraordinary figure has been revealed as a dividend to Gupta’s Liberty Primary Metals Australia (LPMA), the head Australian entity of his metals business which at the time was struggling to keep the Whyalla steelworks in South Australia afloat.

Gupta’s GFG insists the figure wasn’t a cash payout, but a distribution of accumulated profits within the consolidated group. It was, according to an administrators’ report on a related company, part of an August 2024 deal to reassign debts allegedly owed by Gupta’s Whyalla steelworks from Tahmoor to LPMA.

It’s long been known Tahmoor was propping up Whyalla while the coking coal price was high, and the latest revelations are yet another example of the circular economy within

It appears that Sanjeev Gupta’s various companies shifted funds around in order to prop each of them up. Picture Mark Brake

Gupta’s flailing metals empire in which money made by one part was immediately recycled to buttress failures elsewhere.

It helps explain why the edifice built by Gupta has taken so long to collapse, and why the British metals magnate has made good on so few of his big promises to invest heavily in the businesses he bought.

None of Gupta’s Australian metals companies have filed annual reports for the past two years, with the exception of his Infrabuild business, despite earlier this year being ordered by the Federal Court to do so. But they have managed to hand over up-to-date unaudited accounts to the administrators of the company that ran the South Australian port used to export goods from Whyalla.

Those accounts, according to a report by Whyalla Ports administrator Michael Brereton, show that LPMA booked a $164m profit in the 2025 financial year – mostly as a result of the dividend from Tahmoor, formalised in August 2024.

Without Tahmoor’s own accounts it’s not clear how much cash was generated by the business when coking coal prices were hovering near record highs in 2023 and 2024. But $427m is a lot of money and it’s a fair bet its loss is what put Tahmoor into so much financial trouble of its own.

Its 600 workers have been stood down since February after suppliers got sick of being paid late, or not at all, and stopped deliveries to the mine. Tahmoor wasn’t even paying its workers’ compensation bills to the NSW government-backed Coal Mines Insurance, which is now seeking to wind the company up.

Also swinging in the wind are hundreds of other creditors, small and large, estimated to be owed more than $100m.

And without the LPMA accounts it’s difficult to work out where all that money went. But Whyalla’s own debts kept mounting until the South Australian government stepped in to send the steelworks into administration in March.

Even if that’s where some of the money went, stripping cash from Tahmoor would only have worked out if the coking coal price had come roaring back (it didn’t) or if there were a miraculous return to profits at Whyalla (there wasn’t).

Still, the revelation solves at least one mystery: how Gupta has managed to pay the wages of the workers stood down at Tahmoor since February. The payments have probably come from the profits pulled out of the joint in the first place.

Mind you, even any remaining cash held by LPMA is now under threat, as mining contractor NRW, which is owed $125m for its work at the iron ore mines that feed Whyalla, is trying to wind the company up.

RBA’s golden windfall a tad tarnished

Some good news from the Reserve Bank of Australia, which returned to profit last financial year, but still won’t be paying a dividend.

The RBA booked an accounting profit of some $11bn for the full year, but its balance sheet improved by $15bn on the back of a $3.8bn lift in the value of the 80 tonnes of gold it holds in the UK, according to this week’s annual report from the central bank.

Wise readers can probably guess where we’re going with this.

The Reserve Bank isn’t issuing dividends as its liabilities still outweigh its assets by about $5.3bn – largely as a result of the $188bn it lent out to the banks at negligible interest rates to prop up the economy at the height of the pandemic.

Australia’s financial position would look very different if the RBA hadn’t sold off its gold holdings in 1997. Picture: AFP

That’s improving, but not quickly enough to let the RBA lend a hand to Treasurer Jim Chalmers anytime soon.

Ah, but imagine what could have been if the RBA hadn’t flogged off the bulk of its gold holdings back in 1997, under the wise leadership of the then newly appointed RBA governor, Ian Macfarlane, then treasurer Peter Costello and prime minister John Howard.

The trio dumped 167 tonnes of gold on to the market, bringing in $2.4bn at an average $450 an ounce – depressing the price and nearly putting a fair whack of Australia’s gold miners out of business at the same time, as it happens.

For the record, gold is now worth about $6142 an ounce.

Such is the recent gold price surge that even since the beginning of the financial year the value of the RBA’s gold holdings has gained another $3bn.

Had the RBA held on to those 167 tonnes, they’d be worth a cool $33bn at today’s prices.

The total value of the 247 tonnes once held by the RBA would have jumped $20.9bn since the beginning of last financial year, to about $48.8bn – enough to handily wipe out any negative equity left in the system.

Sadly, it was not to be.

INSIDE MARGIN CALL

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