Mining company placed into liquidation
Liquidators have been appointed to collapsed North Queensland miner Cudeco Ltd with its assets now expected to be retained by its secured Chinese financiers.
Long-suffering retail shareholders and unsecured creditors are expected to receive nothing, while employees can now apply to the Federal Government's Fair Entitlements Guarantee Scheme to recover some of their wages and entitlements.
Federal MP Bob Katter said the development was a major blow to the region and he called on governments to support major projects such as the proposed $1.5 billion Copperstring transmission line project to reduce electricity prices to mining sites.
"There will be huge losses for businesses and shareholders, particularly in north west Queensland," he said.
"Employees were hoping for a better outcome but that's not going to happen now.
"I would urge them to get their applications in for entitlements as soon as possible."
Cudeco developed the Rocklands copper mine near Cloncurry in 2016 before operations were suspended in 2018 and the company was placed in receivership and administration on July 1, 2019.
Receivers, backed by the mine's Chinese investors, had proposed a deed of company arrangement, including raising $50 million to partially pay unsecured creditors and employees and restart the mine.
Administrators used a casting vote in a creditors' meeting last month to proceed with the plan. Yesterday, they notified creditors the company instead had been placed in liquidation.
They blamed a lack of funding, which they said was initially to be paid by receivers, to file an application to the courts to vary the payment of employee entitlements.
The application was needed because employees had rejected the variation.
"Funding was not released to the administrators so that the application could be made," liquidator Matthew Joiner of Cor Cordis said.
He said as the application could not be made and the proposed deed was unable to be executed by an April 30 deadline, the firm was deemed to have passed a special resolution that it be wound up voluntarily. He said no return was expected to unsecured creditors or shareholders.
According to the creditors report, secured creditors are owed $150.9 million, employees $6.7 million and unsecured creditors $31.9 million.
Mr Joiner said they would now apply to the Australian Securities and Investments Commission for funding to provide a requested supplementary report to an earlier report of alleged potential director breaches and offences.
Originally published as NQ Mining company placed into liquidation