Less than a year after it produced its first ROM coal to the surface, Dartbrook Mine in Muswellbrook has plunged into voluntary administration.
Administrators Shaun Fraser and Jonathan Henry were appointed on 3rd July, a day after AQC asked for a halt in share trading.
In a statement to the ASX back in June, AQC said they had defaulted on a $174 million loan from its key backer, Singapore company Vitol. At that time, there were two conditions that remained unsatisfied; one of those included railing 200,000 tonnes of produced coal in a consecutive 30-day period.
At the time AQC told the ASX, “the Dartbrook JV has contracts in place to rail the required tonnage and remains focused on commencing exports of its high-quality thermal coal product in the near future once more steady state production is reached,
“The outstanding matters are largely administrative, and we have no reason to believe that they will not be satisfied in due course.”
Fast forward a month later and AQC defaulted on that loan.
In a statement to the ASX on July 7th, AQC said “because receivers and managers have been appointed to all assets of the Dartbrook Mine and given the size of the senior secured debt, it is unlikely that the Company will receive any distribution after the conclusion of the receivership and concurrent voluntary administration. As a result, the Company’s current working assumption is that there is no value to its interest in the Dartbrook Mine”.
MEU Northern Mining and NSW Energy District President Robin Williams said they are in discussions with the administrators.
“The mine is continuing to operate while in administration with no immediate impact to jobs. This is an unfolding situation, and we will continue to engage with administrators to support our members’ ongoing employment and entitlements.”
Dartbrook Management released a statement to say they are “disappointed” that as a consequence Vitol Asia has taken control of the business by appointing Receivers and they will be the future beneficiaries of the “great assets and opportunities that Dartbrook has to offer”.
“Dartbrook Management would like to recognise the hard work and tireless efforts that the entire workforce and management team have made to make the re-opening of the Dartbrook mine the success that it has been to date.
“This action on behalf of the Operating Group to appoint Administrators is in no way a reflection of the efforts or outcomes achieved by this team.
“It is unfortunate that the decision has had to be made to appoint Administrators to the project at this time, especially when all of the hard work in re-establishing the mine has been done and the mine is so very well positioned for the future.
“However, we recognise the invidious position that the Directors of the Operating Group were left in when faced with the decision by the financial sponsors that they were no longer prepared to provide funding to enable the mine to continue to operate as it had to date.
“We understand that Vitol Asia have advised the workforce that they will be continuing to fund the business and it will be “business as usual” insofar as they are concerned. We are comforted that this will be the case, for the welfare and well-being of all the hard-working employees and contractors who may be affected by this decision.”
There are a number of businesses in the Upper Hunter who have been contracted to undertake work at the Dartbrook mine.
Muswellbrook Shire Mayor Jeff Drayton said there are a number of local businesses who are at risk of not getting paid for work undertaken at the site.
“It’s not looking good. Quite a few contractors, and Council are owed a considerable amount.
“The problem is how long can those businesses ride it out? We’re talking about businesses who might only employ 5 or 6 people who are owed hundreds of thousands of dollars and have been operating for 20 plus years. The concern is that they won’t have the ability to carry all this debt and eventually it’ll break them.
“The frustrating this is that everyone we have spoken to say the mine is at the stage it should be at and it’s about to be able to make money.
“And yet, we’re in this situation,” Mayor Drayton said.
MORE THAN 100 WORKERS SHOWN THE DOOR
Since @ The Coalface went to print more news emerged from the Dartbrook Coal mine with the receivers putting off more than 100 workers.
The receivers, FTI Consulting, who are currently operating the mine terminated more than two-thirds of the workforce on Monday. They released a statement to say it wasn’t an easy call to make, but it was necessary.
“A number of redundancies have been made to match the operational requirements of the Dartbrook Coal Mine. While this wasn’t an easy decision, it was necessary to ensure that operations at Dartbrook continue and are placed onto a sustainable financial footing.”
MEU Northern Mining and NSW Energy President Robin Williams said the shock decision has come just days after the receivers assured them that operations would continue as normal.
“We were suddenly told last week that over 100 jobs – nearly two-thirds of the workforce – would be slashed. These include over two-thirds of Dartbrook’s EA workers, who have been sacked while FTI still retains labour hire contractors at the site.
“Over the weekend, operations were wound down while workers were left in the dark, waiting to hear if they would be required,” he said.
“Many of them have now been unceremoniously notified by email that they no longer have a job.
“This situation has been handled disgracefully. Workers not only facing unemployment, but they’ve also been told their redundancy entitlements will not be honoured.”
“This kind of dodgy corporate behaviour is unacceptable. It’s hurting families and the local community.”
Robin said the dispute is currently before the Fair Work Commission.
The Dartbrook Board released a statement last week to say they were “disappointed” to see the operation head in this direction.
“Dartbrook Management would like to recognise the hard work and tireless efforts that the entire workforce and management team have made to make the re-opening of the Dartbrook mine the success that it has been to date.
“This action on behalf of the Operating Group to appoint Administrators is in no way a reflection of the efforts or outcomes achieved by this team.
“It is our view that over time the Dartbrook mine will be a resounding success.”
