Unions have sought to reassure workers at the Bell Bay manganese smelter that the financial woes of owner GFG Alliance can be resolved and their jobs retained.
GFG's financier Greensill Capital was placed into administration this week after it was unable to repay a $140 million loan to Credit Suisse.
Greensill reportedly stated it had $5 billion of exposure to GFG which it claimed was "experiencing financial difficulties".
Australian-owned Greensill has been financing GFG's rapid expansion in recent years, but The Examiner understands Greensill did not lend to the Bell Bay smelter.
Since then, the smelter has continued to operate as "business as usual" with the same rosters, line managers and company systems, but with a rebrand to Liberty Bell Bay, according to the Australian Workers Union.
Required capital upgrades, detailed by smelter workers last year with estimates of $60 million, have yet to proceed.
AWU Tasmania assistant secretary Robert Flanagan said it was still too early to fear job losses at Bell Bay.
"The union has been in direct discussions with GFG's Australian operations and our understanding is that they are currently in negotiations for refinancing arrangements given what's happened with Greensill," he said.
"We understand from discussions that there's no need to be concerned. We're monitoring the situation very closely."
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The purchase of the Bell Bay smelter by GFG, owned by British billionaire Sanjeev Gupta, secured the future of 250 jobs at the site after years of uncertainty while South32 sought a new owner.
GFG's operations - which includes Liberty Steel - span 30 counties, but the AWU believed its Australian operations were among the most secure.
"The other thing we're communicating to our members is that the economic outlook for the steel industry is strong thanks to a boom in civil and residential construction projects," Mr Flanagan said.
"And the union is working closely with state and federal governments to prioritise local steel in upcoming major projects which will ensure a strong steel market for years to come.
"There's an underlying confidence in the businesses that GFG is operating."
Bass Liberal MHR Bridget Archer said she was "seeking further information" about any potential impact on the Bell Bay smelter, and she will be meeting with GFG business development manager Mark Scholem in the coming weeks.
A Tasmanian Government spokesperson said the government had been briefed on the situation.
"GFG Alliance has advised that it and its core operating divisions have adequate funding for their current needs while its refinancing plans to broaden its capital base and obtain longer term funding are progressing well," the spokesperson said.
"Government, through the Office of the Coordinator-General, maintains an ongoing relationship with Liberty Bell Bay and will continue to work closely with the company and its owners."
GFG has confidence in Australian operations
A spokesperson for GFG Australia said high steel prices and strong markets for aluminium and iron ore gave the company confidence for the future.
"While Greensill's difficulties have created a challenging situation, we have adequate funding for our current needs," the spokesperson said.
"Through our global efficiency drive we've improved our operations' margins with most of our major businesses generating positive cashflows.
"Discussions to secure alternative long-term funding are progressing well but will take some time to organise.
"While this takes place we have asked all of our businesses to manage cash carefully. We thank our employees, customers and suppliers for their continued support."