Sale option brings new hope for big smelter
New hope for the survival of major Tasmanian smelter Temco, with potential buyers in discussion with owner South32 Ltd.
New hope has emerged for the survival of major Tasmanian smelter Temco, with potential buyers in discussion with owner South32 Ltd.
The global mining and metals company on Thursday announced the potential sale discussions, delaying a previously imminent decision on the fate of the manganese alloy smelter until the first quarter of next year.
South32 has for months been reviewing the future of the 50-year-old Temco plant, which is a key driver of the northern Tasmanian economy, employing about 300, and one of the state's biggest power users.
While sale was one of three options previously flagged by the company, most observers had seen it as the least likely, with closure or mothballing of the plant, near George Town, thought more probable.
The announcement of divestment discussions for Temco and a similar Metalloys smelter in Gauteng, South African, creates further uncertainty but more hope for the workforce.
“We are assessing divestment options for both Metalloys and Temco and we have not yet made a decision on the way forward,” a company statement said.
“We continue to engage with our employees, governments and all other stakeholders and we will provide a further update in the first quarter of next calendar year.
“The review is continuing and includes an assessment of options for each operation including divestment, care and maintenance, or closure.”
It is understood different companies have expressed a potential interest in purchasing the Tasmanian and South African plants, and South32 wants to take time to fully explore the possibilities.
South32 would not reveal the identity of the potential purchasers, nor their likely intentions for the plants. However, the announcement was welcomed by George Town Mayor Greg Kieser and trade unions.
“I feel tremendous empathy for those employees who have a delay in knowing the exact outcome,” Mr Kieser said.
“But I’m viewing this as a glass half full announcement, where it would appear there are more discussions going on in the background with third parties. I’m hopeful that will lead to a positive outcome.”
Australian Manufacturing Workers’ Union state official Jacob Batt said a sale would be a “positive outcome”. “My understanding is that there are multiple interested parties and if we can get a sale that would be a fantastic outcome,” Mr Batt said.
Tasmania’s Liberal government is understood to have offered incentives for Temco to remain in production and these are likely to extend to any new owner willing to keep the plant operational.
The company’s review of the two plants is understood to be influenced by a global shift in manganese alloy production, with China and India increasing steel production and developing their own alloy capacity.
There is also significant new capacity in Malaysia, which has access to cheap hydro power and is close to markets.
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