Govt to create regional fund with profits from tungsten mine investment

Pic: The Dolphin Tungsten Mine on King Island. The Tasmanian Government says proceeds from its investment in the mine will help establish a $20 million fund to support regional communities facing economic disruption.

The Tasmanian Government will establish a $20 million fund to support regional communities facing economic disruption, using proceeds from its investment in King Island's Dolphin Tungsten Mine.

Premier Jeremy Rockliff announced the Recovery Fund for Regional Resilience on Tuesday saying it would provide long-term support for communities affected by major industry changes, employer closures, job losses and other economic shocks.

The announcement follows the State Government's decision to convert its $10 million loan to Group 6 Metals, operator of the Dolphin Tungsten Mine, into an equity stake as part of the company's financial restructuring.

The Government subsequently provided further financial assistance to support the mine's continuing operations.

Premier Rockliff said the investment had delivered a financial return that would now benefit regional communities across Tasmania.

"The strong investment made by the Tasmanian Government to support the future of the King Island Tungsten Mine has allowed us to reinvest a significant portion of the windfall back into the very regions that helped generate that success," he said.

"This Fund is about transforming a one-off financial return into an enduring asset for regional Tasmania."

The $20 million fund is intended to support economic diversification, workforce transition, investment attraction and community-led recovery initiatives when regional communities experience significant disruption.

Mr Rockliff said governments were too often forced to respond after a major employer closed or an industry experienced significant change.

"Instead, we are getting ahead of those challenges by establishing a fund that will help communities navigate economic disruption, attract new investment and create new opportunities for the future," he said.

He said that the Government intends to preserve the fund's capital while allowing it to grow over time, providing an ongoing source of support for regional Tasmania.

Mr Rockliff said the investment in King Island and the new fund represented approximately $25 million in support for Tasmania's regions.

He also indicated that proceeds from the Government's investment in the mine would contribute to reducing state debt.

However, the announcement does not specify how much the Government has realised from its investment in Group 6 Metals, the transaction that generated the return, or how much of it exactly will be allocated to debt reduction.

It also does not detail the fund's eligibility criteria, how communities will apply for assistance or whether any funding has been earmarked specifically for King Island.

The Dolphin Tungsten Mine is one of King Island's major employers, and the State Government has previously identified its importance to the island's economy and local businesses.

The new fund will potentially provide a mechanism to assist regional communities facing circumstances similar to those experienced by King Island during periods of uncertainty surrounding the mine.

Further details about the fund's administration, investment arrangements and access to assistance have yet to be announced.