Administrators have been appointed to oversee the holding company of a coal mine in New South Wales, which is facing significant financial challenges. The Tahmoor coking coal mine, located southwest of Sydney, has been closed since February due to cash flow issues. The mine's owner, British billionaire Sanjeev Gupta's GFG Alliance, has revealed that it owes $30 million in royalties as part of over $100 million in total debts.

Approximately 500 workers were initially stood down with pay, but many contractors have recently been informed that they will no longer receive compensation. On Monday, Liberty Primary Metals Australia (LPMA), the parent company of the mine, entered voluntary administration. William Buck has been appointed as the administrator. LPMA also oversees the Liberty Bell Bay smelter in Tasmania and OneSteel Manufacturing (OSM), which operates the Whyalla steelworks.

The South Australian government had previously forced OSM into administration in February, with contractors and the state government owed tens of millions of dollars. GFG Alliance stated that placing LPMA into administration was a strategic move to restructure amid ongoing financial difficulties in South Australia.

Recent documents filed with corporate regulators have unveiled a complex network of financing within the GFG Alliance. Notably, substantial funds were redirected from the profitable Tahmoor Colliery to struggling operations, including Whyalla. In its 2024 annual report, Tahmoor Coal reported a profit of $85.7 million. However, the report also disclosed that the mine provided a $354.8 million loan to OSM when the Whyalla blast furnace was shut down for extended periods. This loan was later transferred to LPMA as a $427 million dividend, significantly reducing the mine's value.

The equity of Tahmoor Coal plummeted by over 40%, dropping from $479.8 million in June 2024 to $287.3 million by September 2025. Six months after this financial maneuver, Tahmoor was forced to close due to an inability to pay for essential supplies. GFG Alliance indicated that between July 2024 and February 2025, Tahmoor provided over $98.6 million to support the Whyalla steelworks.

Efforts to separate and refinance Tahmoor have faced delays, primarily due to a disputed security issue with Greensill UK. To sustain operations, the mine has sought emergency funding through refinancing, loan tranches, and cash injections. However, KPMG, the company's auditor, has expressed skepticism about the feasibility of these plans, stating it could not verify the financial assumptions made by the company.

In August, the New South Wales government contacted Tahmoor regarding $29.4 million in unpaid royalties. Subsequently, a charge was imposed on all of Tahmoor's mining leases. Coal Mines Insurance Pty Ltd, which manages the coal industry workers' compensation fund, is owed $4.7 million and has initiated legal action to wind up the company. Additionally, creditors, including contractors and suppliers, are pursuing over $17 million in unpaid invoices.

As of the report's filing, Tahmoor's total debts were estimated at around $100 million. Company directors indicated that approximately $244 million would be needed to fund operations through the end of 2026. Since operations were halted, GFG Alliance has reportedly injected $4 to $5 million weekly into Tahmoor, totaling $60.4 million.

Last week, RStar, the mine's main contractor, laid off about 250 workers after GFG defaulted on payments. Local federal MP Angus Taylor has called for an "orderly exit" if the mine cannot be restarted. In correspondence, Gupta informed Taylor that he had provided RStar with $5.4 million and attributed delays in payments to the Diwali holidays in India. He assured that pay for permanent employees had not been affected and expressed openness to various options, including financing, joint ventures, or a sale, although discussions with potential buyers have not yet yielded results.

William Buck, the administrator for LPMA, expressed cautious optimism, stating there is reasonable confidence that a positive outcome may be achieved in the interests of stakeholders.