The administrators of Panoramic Resources has announced the suspension of operations at the Savannah nickel project, in Western Australia, affecting 140 workers who will be made redundant over the coming days.
At the time of Panoramic going into administration, it was the intention of administrators FTI Consulting to keep the Savannah project operational. While operations have continued, including a shipment of 10 000 t of nickel concentrate last week, nickel prices have continued to trend lower.
“While it was our intention to continue to trade-on the Savannah nickel project and preserve the employment of the operating team as we explored opportunities for a sale or recapitalisation of Panoramic’s business, after consultation with major creditors and key suppliers it is apparent that the prospect of achieving a near-term turnaround of operations and finances is low.
“Given the near-term funding requirement for continued operations, we have made the difficult decision to suspend operations while the sale/recapitalisation process progresses,” said administrator and FTI Consulting senior MD Daniel Woodhouse.
“The administrators, with assistance from Treadstone Resource Partners, will continue a dual track strategy to sell or recapitalise the Panoramic business. This process will continue regardless of the Savannah nickel project’s operating status and look to realise the full value of the defined ore bodies, extensive infrastructure, and exploration potential of the project.”
The 140 onsite staff members at Savannah will be stood down, some with immediate effect.
Employees with unpaid accrued entitlements are creditors in a voluntary administration of a company with certain statutory priority entitlements ranking above the claims of unsecured creditors. Employees may also be entitled to make a claim against the Commonwealth Fair Entitlements Guarantee scheme in the event of a shortfall in distributable funds available to meet certain of their entitlements, depending on the outcome of the administration process.
The news of the redundancies at the nickel mine comes as aluminium producer Alcoa also announced the curtailment of operations at the Kwinana alumina refinery, in Western Australia, which will impact on 1 050 positions.