Labor concern about mine debt to equity deal

The State Labor Opposition has expressed concern about the Government’s recent announcement it will convert a $10 million loan with Group 6 Metals (G6M) to equity.

“The ongoing cashflow and production issues at the Group 6 Metals’ Dolphin mine are concerning, given its importance to the King Island community”, member for Braddon and Shadow Minister for Resources Dr Shane Broad, said.

“We look forward to seeking more details about the debt-for-equity deal when Parliament returns. 

“However, this new approach of taking equity in a mining operation is curious given that the Liberal Government stood by as 200 miners lost their jobs at the now mothballed Avebury mine, including refusing to deliver the financial support they had promised.

”There is very little detail so far on what the equity stake actually means. The House of Assembly returns on March 4 so we hope to learn more.”

No details have to date been provided regarding how the debt to equity will operate, agreement terms nor its effect upon share value.

However, the Tasmanian Government confirmed that the debt to equity agreement with G6M will not impact royalties payable to the state government. 

“The payment of royalties is a requirement of the Mineral Resources Development Act 1995. Royalties are payable on a quarterly basis and are collected by Mineral Resources Tasmania (MRT). There is no impact with regards to royalty payments.

"MRT will continue to collect royalties from all mines as normal. Dolphin Tungsten has no outstanding royalty payment owed”, a Government Spokesperson said.