Fears for 150 jobs as miner calls in administrators
Peter KerResources reporter
Apr 5, 2024 – 12.52pm
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Close to 150 workers at Western Australia’s Abra mine face an uncertain future after administrators were called in to sell or recapitalise its eponymous parent company.
Administrators KordaMentha will seek new owners for ASIC-registered company Abra Mining, which primarily produces lead and silver in WA’s Gascoyne region but has also been touted for deeper copper and gold resources.
It has been a tough year for mining workers. Louie Douvis
Abra is 60 per cent owned by ASX-listed Galena Mining, which had just $3.8 million of cash on hand at December 31 and now faces an uncertain future of its own.
The other 40 per cent is owned by Japanese company Toho Zinc, which spent $90 million buying its stake in the mine in 2019.
Abra has been struggling under a heavy debt load after borrowing $US110 million ($167 million) in 2020 from specialist resources industry lender Taurus to fund development of the mine.
First production at Abra was achieved in May last year and only $US4.5 million of the debt has been repaid as the mine made narrow profits in late 2023.
Weathering strife
Abra’s situation took a turn for the worse in recent months when heavy rain disrupted production.
Several WA gold miners have also blamed rain for production downgrades this month, while weather disruptions at the Savannah nickel mine was the final nail in the coffin for Panoramic Resources, which
fell into administration in December.
Abra’s debt was secured over the mine assets, meaning Taurus is in the box seat to take control via the administration process.
Lead prices reported by the London Metals Exchange have traded in a range between $US1950 a tonne and $US2350 a tonne over the past 15 months, and the price was within that range at $US2084 a tonne on April 4.
Sale push
KordaMentha restructuring partner Richard Tucker said he was confident of finding a buyer.
“We intend to continue to operate the mine during the administration while we seek offers to recapitalise the company through a sale or deed of company arrangement process,” he said.
“We are asking all suppliers and stakeholders to work with our team to ensure value is preserved and a sale or recapitalisation can be completed as quickly as possible for the benefit of all stakeholders.
“This is an excellent asset that will attract considerable interest from local and offshore investors.”
The cashflow crisis at Abra comes after
a tough six months for Australian miners. Core Lithium, First Quantum and IGO have shut mines on the back of slumping lithium and nickel prices.
BHP may soon follow at its WA nickel operations, which are under a review that could lead to temporary closure.
Peter Ker covers resource companies for The Australian Financial Review, based in Melbourne. Connect with Peter on
Twitter. Email Peter at
pker@copyright link
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