Article by Brad Thompson, courtesy of The Australian.
Taxpayers are set to be the big losers after struggling mineral sands miner Strandline Resources waved the white flag and entered voluntary administration.
The taxpayer-funded Northern Australia Infrastructure Facility is Strandline’s biggest financial backer and has dished out loans totalling about $140m to the company since 2020, including $10m in the December quarter.
Strandline had been working on a recapitalisation deal after being granted breathing space by NAIF and its other major financiers, the National Australia Bank and Nordic bond holders, who agreed in December to defer debt repayments until the end of February.
The latest failure of a NAIF backed project in WA follows the collapse of Kalium Lakes in 2023. The then ASX-listed potash play had received about $83m in NAIF loans.
NAIF chief strategic policy officer Cathie McBean told The Australian Bush Summit held in Port Hedland last year that failed investments were an inevitable consequence of a mandate to invest where major banks wouldn’t tread.
The $7bn facility’s investment mandate includes funding of projects in northern Australia that facilitate and support the development of economic infrastructure.
The Albanese government is reviewing whether NAIF’s mandate should be extended beyond 2026. Opposition leader Peter Dutton has promised to make NAIF permanent if the Coalition wins this year’s election.
“The Coalition established the NAIF, we funded the NAIF, and we legislated the NAIF. And now the Coalition under my leadership will ensure the NAIF is a permanent fixture in government,” he said in Cairns last month.
On Monday, Strandline told shareholders it had been trying to lift performance at its Coburn mineral sands project in WA’s mid-west while working with secured lenders on a debt restructure deal.
“The company was focused on achieving an outcome with a sustainable level of gearing and a new strategic long term off-taker partner to enable it to recapitalise and relist,” Strandline said.
Perth-headquartered Strandline said it had been close to securing an injection of funds but a late twist saw the board decide a deal couldn’t be done in “an acceptable timeframe or on acceptable terms”.
The stock has been suspended from trading since October 2023 as the company, which shipped its first cargoes of mineral sands in 2022, fought to stave off collapse.
Strandline sold its Tanzanian mineral sands assets to Shanghai-listed Shenghe Resources for $43m last August to help pay down debt which had reach almost $340m by June 30, 2024.
Receivers from McGrathNicol have assumed control of Strandline’s Coburn mineral sands project and intend to continue operating it on a “business as usual” basis while working a sale and or recapitalisation.
24.02.2025