Australia’s only manganese alloy smelter has closed, leaving the plant’s future uncertain and the country increasingly reliant on imported alloys for steel production.
The beleaguered smelter at Liberty Bell Bay, about 50 kilometers north of Launceston, was producing an alloy from manganese ore called ferromanganese, a critical component of steel making used in defence, construction and mining.
The company halted operations in May last year due to ore supply issues and unstable market conditions, and in August received a $20 million loan from the Tasmanian government so its former owner, GFG Alliance, could purchase a load of manganese ore to continue operations.
But the plant never resumed operations.
Since work was suspended in May last year, workers at the plant have faced uncertainty. (Delivered)
In January 2026, GFG defaulted on the state’s loan agreement and the Tasmanian Government decided to appoint receivers and receivers to protect the 23,000 tonnes of ore reserves.
By March, Liberty Bell Bay was placed under voluntary management.
Now that the buyer consortium has failed to reach an agreement to reopen the plant, the future of the plant remains unclear.
“Significant rehabilitation obligations”
The Tasmanian Government has left the door open for another smelter to operate at the site.
“There may still be opportunities in the future for the smelter operator to monitor the plant and bring it back into production,” Tasmania’s Minister for Business, Industry and Resources Felix Ellis said.
Felix Ellis says plant managers and owners have a responsibility to clean up the area. (ABC News: Georgia Hogge)
Mr Ellis said while it was too early to give specific details about the long-term future of the site, returning it to service in the short term was no longer an option.
Cleaning up the site is a responsibility that still falls on administrators and owners, he said.
“The site will require significant cleanup efforts,”
– Mr. Ellis said.
“Certainly Tasmanians will understand that these large industrial sites do have significant remediation responsibilities.”
In October, a report by William Buck, administrator of Sanjeev Gupta’s Whyalla Ports Pty Ltd, gave some insight into how much it might cost to restore the site.
“Management has indicated that additional working capital funds still need to be found to maintain Liberty Bell Bay (LBB) operations, and if LBB were to fail and close the facility, there would be a recovery requirement of approximately $200 million,” the report said.
Ray Mostogl says rebuilding the plant will likely cost more than restarting the smelter. (ABC News)
Tasmanian Minerals, Manufacturing and Energy Council (TMEC) chief executive Ray Mostogl said while he didn’t have exact figures, he believed closing the smelter would be costly.
“In my opinion, decommissioning it and rehabilitating it will cost more than restarting it.”
Mr. Mostogl stated this.
He said the situation would also be challenging in the wider supply chain of contractors, suppliers, engineers and experts.
“I think we will see a domino effect in the Tamar Valley as a result of what we have been advised today,” he said.
The closures deal a blow to Australia’s metals manufacturing ambitions.
The closure of the manganese plant means Australia has lost the ability to process the vital mineral domestically.
“But that doesn’t mean we can’t continue to mine it or produce manganese concentrates,” said Dr Tim Werner, senior lecturer in energy transition at the University of Melbourne.
“It just means they will be processed overseas.
“I would say it’s more of a blow to Australia’s ambitions to become a domestic metals producer.”
Tim Werner says steelmakers will turn to overseas manganese suppliers. (ABC News: Peter Drought)
Dr Werner said the plant closure would primarily impact the market for manganese alloys used in steel production and could have knock-on effects on a number of local industries.
However, he said these industries exist in an already volatile market accustomed to geopolitical risks and potential supply chain disruptions.
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In March, Australia committed more than $50 million in funding to build a domestic critical metals recycling industry.
“It’s a new market, it’s a volatile market, and the competition, especially from overseas, is extremely strong,” Dr. Werner said.
“The questions we need to discuss are: How realistic are our ambitions to produce more metals in Australia?”
Without domestic production, TMEC’s Mr Mostogl said Australia would have to rely on international imports to produce steel.
“From a sovereign risk perspective, we are now more exposed to geopolitical risks and other countries making decisions about whether they will supply oil and at what price,” Mr. Mostogl said.
“This is not a good outcome for Australia right now and it will have implications for how we protect this supply chain so that we still have a steel industry.”
Ore purchased on credit remains in place
It remains unclear what will happen to the site’s smelters, smoke dams, sinter plant, stormwater, wastewater ponds and slag stockpiles, as well as their ongoing environmental management.
Catherine Murdoch has previously stated that even if the smelter does not operate, there is still a risk of environmental pollution. (ABC News: Maren Preuss)
In April, the Tasmanian Environmental Protection Authority (EPA) issued a notice to Liberty Bell Bay that the plant’s ability to “meet its critical environmental obligations” was in doubt.
“The Environment Agency recognizes that if staff are reduced at the site, there may not be enough staff to maintain critical equipment,” Tasmania Environment Agency director Catherine Murdoch said.
“I am satisfied that although smelting activity has ceased, environmental flows will continue and may become polluted.”
Among the Environment Agency’s concerns were the risk of contaminated wastewater being discharged into the nearby River Tamar, the continued storage of hazardous materials on site and the continued maintenance of dust emissions.
There are concerns about Australia’s sovereign steelmaking capacity following the closure of Liberty Bell Bay. (ABC News: Mitchell Woolnough)
And there is another consideration: the ore purchased under the Tasmanian government loan remains in place.
“The reason the ore is still there at this time is because we wanted to give the future owner the best chance of restarting operations in the shortest possible period of time,” Mr Ellis said.
He said the Tasmanian government had a “very high level of security” over the ore and wider site and was confident the loan would be repaid.
“We maintain that security. The ore has retained its value,” Mr Ellis said.