Sanjeev Gupta faces loss of Tahmoor Coal as creditors lose patience
Embattled tycoon Sanjeev Gupta faces losing his last Australian mine as a union-backed insurer launches legal action over unpaid debts at Tahmoor.
Sanjeev Gupta faces losing his grip over his last remaining Australian mine after an insurer controlled by unions and the coal industry launched legal action to wind up the embattled metals tycoon’s Tahmoor colliery in NSW.
Coal Mines Insurance, the NSW government-mandated workers compensation insurer for the coal industry, filed a winding up action in the NSW Supreme Court against Tahmoor Coal last week over unpaid debts.
The move could see liquidators appointed to the company unless Mr Gupta’s GFG Alliance pays the outstanding amount, believed to run into the millions, or successfully disputes the bill in court.
It marks a major setback for Mr Gupta six months after Anthony Albanese and South Australian Premier Peter Malinauskas seized control of his Whyalla steelworks with the state irate over failing to receive “tens of millions” of dollars owed in royalties.
Three other local creditors — Newcastle’s Coal Prep Technology, Shoalhaven’s Encompass Metal Works and Touleng Services in the Illawarra — have also won default judgments against the company over the last six weeks in NSW District Courts.
GFG said it was working with Coal Services, the parent company of Coal Mines Insurance, as it sought to resolve “all outstanding matters”.
“We are continuing to work hard on funding options required for a return to production at Tahmoor Colliery which would enable us to restart our revenue stream. Employees continue to be paid during this period of limited operations,” a GFG spokeswoman said.
Over 50 separate payment defaults have been lodged against Tahmoor Coal since January this year, according to CreditorWatch.
The credit agency began downgrading the business in February and rates Mr Gupta’s coal business an ‘F’, indicating it has a 100 per cent chance of default within the next 12 months.
Creditors include a subsidiary of engineering giant Worley owed $59,615, Victorian industrial equipment supplier ATOM Supply at $636,862 and national elevated work platform company Australian Access Hire which has claimed a $139,327 outstanding debt.
Mining at Tahmoor was wound down in December 2024 due to “financial constraints”, and the bulk of the colliery’s workforce was sent home on full pay in February until operations resumed.
But, the winding up action filed by Coal Mines Insurance threatens to shake the mine loose from Mr Gupta’s control, and may impact his chance of finding a buyer.
Even lenders of last resort — including Oaktree Capital — are believed to have walked away from discussions over refinancing packages for Tahmoor.
The Australian understands at least one potential buyer remains interested in the 2 million tonne per year coking coal operation. But, a long list of others have walked away, some losing interest but others in the expectation the mine will lapse into administration and present an opportunity to get a cheaper deal.
The move by the NSW government-linked Coal Services is also significant given its role protecting the state’s coal mining industry and its workers, indicating patience with the former billionaire within the powerful union and industry association has also worn out.
Tahmoor’s 560-strong workforce remain on full pay but are not thought to be eligible for bonuses given the coal mine is not in operation.
Bob Timbs, an official with the Mining and Energy Union and a director of Coal Services, said he was frustrated by the situation at Tahmoor.
“Enough is enough. Gupta needs to make a decision on what he’s going to do for the future of the mine and for the wellbeing of the workers and community,” Mr Timbs told The Australian.
Coal Services was contacted for comment.
Around 110 workers remain on site currently, carrying out maintenance and safety roles.
Sources said just a handful of workers are on the Tahmoor site in maintenance roles, with no clear timeline for when any sale or rescue may occur. The mine is effectively in care and maintenance mode.
In July, Tahmoor Coal was ordered by the Supreme Court of NSW to lodge outstanding annual reports with the Australian Securities and Investments Commission by August 22.
GFG’s Liberty Bell Bay manganese smelter in Tasmania’s north paused production in May with the federal and Tasmanian governments understood to be in discussion with White Oak, which holds security over the smelter.
Talks have focused on White Oak taking the smelter into administration, after which the governments would assist it to source fresh ore shipments to resume production.
Mr Gupta’s InfraBuild in April agreed a final debt restructuring deal with a majority of its bondholders and delivered a board shake-up as the steel manufacturer scrambles to free up funds to avoid a corporate default.
The embattled steel products company finalised $US150m of new debt finance, easing immediate pressure, with some $700m of free cash now on the balance sheet taking into account $US550m of existing bond agreements. But, the deal restrains Mr Gupta from using cash from Infrabuild to bail out other parts of his ailing empire.
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