Valence Industries, owner of the Uley graphite mine south west of Port Lincoln, has entered voluntary administration after failing to raise capital.
The company suspended trading in November, and in December, ceased production at the Uley site. It required $7 million in capex and up to $5 million in working capital to recommence operations, according to a report by The Advertiser.
A nine for one rights issue was announced by the company in March, aiming to raise $18 million to alleviate mounting debt. However, it has been cancelled.
The shut down has been attributed to poor selection of consultants, failure to identify deficiencies to prevent cost overruns, and poor project management.
Laurie Fitzgerald and Michael Humphris of William Buck have been appointed administrators.
Fitzgerald said “all options were on the table” such as potential acquisition, valuing Uley’s plant and equipment, or creating a new company arrangement.
“We are working with the directors at the moment to assess the options while the operations are in care and maintenance with a handful of staff.”
Valance restarted Uley in November 2014, which had been idle since 1993, making it the nation’s only operating graphite site.
The company’s shares last traded at 11.5c, valuing it at $19 million.
This is another blow to South Australia’s resources industry, after Arrium steelworks announced its administration in April with reports it had over $2 billion in debt and owed trade creditors $1 billion and employees $500 million in entitlements.