Mineral Resources (MinRes) has axed 110 jobs after pulling the plug on the Lucky Bay garnet operations, a mine owned by Resource Development Group (RDG). The collapse has cost MinRes at least $260 million.
Andrew Ellison, brother of MinRes billionaire founder Chris Ellison, was paid almost $1 million annually as RDG's CEO—a sum that angered minority shareholders, whose investments were wiped out when MinRes refused further interest-free credit.
The funding withdrawal came amid scrutiny over MinRes's related-party transactions involving family members. Voluntary administrator McGrathNicol estimated RDG was burning through $2.2 million a week before its collapse.
RDG listed on the ASX in 2011 at 20¢ per share but never fulfilled its promise. MinRes owned a majority stake before the collapse. Minority shareholders considered legal action but nothing has eventuated.
MinRes cited the Middle East conflict as a major factor, as it significantly impacted Lucky Bay's sales. Combined with higher diesel and shipping costs, a strategic review determined it was best to cease operations and transition to care and maintenance. MinRes will assess options including a potential divestment.
About 110 RDG staff have been axed, with MinRes offering alternative work where possible. The mine will close on July 1. MinRes shares fell 3.1% to $63.84.
Comments
Join Our Community
Sign up to share your thoughts, engage with others, and become part of our growing community.
No comments yet
Be the first to share your thoughts and start the conversation!