Clive Palmer’s Queensland Nickel faces going into administration

UPDATE: A month ago Clive Palmer said Queensland Nickel would not take money from the Government while he was in charge. After a meeting with Treasurer Curtis Pitt, it seems that has changed.

FOLLOWING an hour long meeting with Treasurer Curtis Pitt, mining magnate Clive Palmer has put out a statement saying he only wants “minimal assistance” from the Government.

Just over a month ago the once self-proclaimed billionaire declared Queensland Nickel would not accept a loan from the government while he was in charge.

He said his Queensland Nickel refinery in Townsville would be self-supporting by mid-2016, but right now is talking about its potential closure.

Seeming to indicate an agreement had not been reached at the meeting, Mr Palmer said the State Government needed to put the welfare of Townsville families “highly on the agenda”.

“Townsville Enterprise reports the closure would affect over 1600 jobs which would be devastating for the North Queensland economy,” he said.

Mr Palmer said “Queensland was facing difficult circumstances”, but the government needed to be at the forefront to support the Townsville community.

He said the loss of the refinery would have serious consequences, plunging the region into a decline lasting up to a decade.

EARLIER: Treasurer Curtis Pitt has flagged support for staff impacted by the looming closure of billionaire MP Clive Palmer’s Nickel refinery as the operation pushes for help to keep its doors.

But he would not reveal whether or not the government would consider a cash bailout to save the 800 jobs at stake.

“I think it is very concerning that a few weeks out from Christmas, Mr Palmer is now threatening to close the plant when it was only a couple of months ago, we had a reassurance to all employees it was remaining open.

“In fact there was a suggestion that there was no discussions or approach to the government.

“Since that time we have repeatedly spoken with the company, we have put out letters to ask the company to disclose the situation, so government could be as well armed as possible to know what the position was and what options the government may be able to consider in providing assistance to those workers.

“This government stands ready to assist workers, we don’t see this as any type of game, we see this as a very important step going forward - talking to the company in a mature and responsible way and ensuring we understand the position of that company, and what the options are going into the future. But this is not a game, this is dealing with people’s livelihoods.”

Mr Pitt said the government needed Queensland Nickel to agree to an independent assessment so the State could get the “complete picture”

“Then the government is able to provide some kind of decision of what assistance we could provide or otherwise,” he said.

“The government is not trying to play any games here, we are dealing with people’s livelihoods, it is important to the people of Townsville and the people of the whole north Queensland region quite frankly.

“We won’t be held to ransom, we want to have all the information available to us.

“I am very happy to meet with Mr Palmer and representatives of Queensland Nickel as we have done in the past to see what options may be available to the government.”

Mr Pitt also took aim at the handling of certain aspects of the business.

“When we have a case of this company having a clear and on the public record, stripping money out of the company to put into other purposes, that is not a sensible way of doing things,” he said.

“It has been widely canvassed that there were donations made by the company to political organisations, so of course, that is a decision for the company, they are entitled to do so being a private company.

“But of course now we see a situation where there is a ultimatum being given to government and a threat of closure, then the questions have to be asked. If that sort of behaviour were to continue, then of course, that is going to be of great concern.

“We know that this business is viable and an ongoing business that could continue to operate in the region, it is experiencing a downturn in the nickel price at the moment, of course, that nickel price may return and some of the consensus forecast says that will be the case.

“What we must do, is if the government ever considered providing any of the support, we knew on what grounds it was being provided and have assurances that there was no more stripping of money out of this company.”

EARLIER: Embattled mining magnate Clive Palmer has arrived at the State Government’s executive building for a meeting with Treasurer Curtis Pitt to discuss the “perilous position” of his Townsville nickel refinery.

He is expected to ask for a “short-term guarantee” to keep the refinery operating while nickel prices are low, despite in October declaring his company Queensland Nickel would never accept a Government loan while he was in charge.

Mr Palmer arrived about 1.20pm, walking briskly attempting to avoid media and not answering any questions.

It comes as the Premier revealed she has commissioned an independent audit of the embattled refinery, which employs almost 800 people, to determine what if anything the government can do to help.

A WA Supreme Court yesterday heard that one of the flagships of Mr Palmer’s business empire was on the verge of collapse and had been refused finance by the big four banks.

In a statement issued this morning Queensland Nickel director Clive Mensink, who is Mr Palmer’s nephew, said he was seeking an urgent meeting with the Premier and Treasurer Curtis Pitt this morning.

The statement alternates between demanding assistance and criticising government.

Mr Mensink said the government needed to support the refinery’s workers, claiming that it paid $40 million a year to a smelter in Gladstone.

This is despite Mr Palmer just last month saying that Queensland Nickel would not accept Government money while he was in charge.

“Queensland Treasurer Curtis Pitt gives away $40 million each year to the foreign owned Gladstone smelter but has refused to support Queensland company Queensland Nickel (QN), the largest employer in North Queensland,’’ Mr Mensink said.

Clive Palmer arrives at Mineralogy House, Brisbane. Picture: Liam Kidston.

“The Government needs to give the same level of priority to the people of Townsville that it gives the people of Gladstone.

“I call on the Premier and the Treasurer to clear their diaries for urgent talks on these matters, for the sake of more than 2000 local jobs,’’ he said.

Mr Mensink said QN was not seeking funds, but wanted a guarantee on a short-term basis.

“The current nickel price has been as low as $3.50 a pound but by June 2016 current forecasts support our operations,’’ he said.

“The company has been operating for over 40 years, many of those with the Queensland Government as the major shareholder.

“Previous governments have provided support at times of low nickel.

“The Premier has not met with me to discuss the futures of over 2000 families in Townsville.” Mr Mensink said.

But despite this, it is understood QN representatives including Mr Palmer have met with both the Deputy Premier and Treasurer in recent months.

Townsville Mayor Jenny Hill also flew to Brisbane last week for crisis talks with Treasurer Curtis Pitt regarding the refinery’s future.

Ms Palaszczuk said the government had been working with the refinery and other parties behind the scenes.

“This is a really significant issue for the Townsville region. We know there are hundreds of people, families that are employed,” she told the ABC this morning.

“The government need to get the full facts before them, and that’s exactly what we are intending to do.

Lawyer told a WA court that if US$48m is not paid to Queensland Nickel the refinery will be put into administration.

“Irrespective of the personalities involved, take Clive Palmer out of it, this is a company that delivers jobs in Townsville and that is what my government is focused on.”

The meeting could be held as early as today.

Ms Palaszczuk says her government is seeking more information from Clive Palmer’s nickel refinery before agreeing to a multimillion-dollar bailout for the operation.

“This is a really significant issue for the Townsville region,” Ms Palaszczuk told ABC Radio this morning.

“The Treasurer has been working extensively with the parties involved.

“We are getting the full facts. There is a lot of work happening behind the scenes.”

Ms Palaszczuk said the government had commissioned an independent assessment of the refinery before making a decision but was waiting on more information from the company.

“I just want to reassure you we understand what’s at stake here. a lot of jobs, a lot of families and this would have a detrimental impact on the Townsville economy,” she said.

“If the government is going to make a decision one way or the other we need to have all the information.”

OVERNIGHT: One of Clive Palmer’s flagship companies is at risk of going into administration as early as today, his lawyers say, as the mining magnate lost his court bid to get an immediate $48 million payment from his estranged Chinese business partners.

The WA Supreme Court heard yesterday Queensland Nickel was in a “worse than perilous position” and without the payment administrators would be called in and its Townsville refinery workers could lose their jobs.

Townsville Mayor Jenny Hill last night said it was “extremely disturbing news” for the refinery’s almost 800 employees and all reasonable steps needed to be taken to protect them.

Mr Palmer’s company Mineralogy had sought an injunction against Chinese state-owned CITIC and a $48 million payment as part of a royalty dispute so QN could meet a “drop dead” payment deadline.

Justice Paul Tottle rejected the bid, saying there was “no basis” for the court to make the order. He wrote that Mineralogy’s submissions and affidavits stated the big four banks had refused to loan QN money.

Palmer United Party leader Clive Palmer.

“As a result of the fall in the nickel price QN is experiencing a liquidity crisis and it has claimed it requires an injection of $28 million to avoid closure of its refinery, job loses for up to 767 employees and avoid QN being put into administration,” Justice Tottle said.

He said Mineralogy’s submissions claimed without the payment it would be unable to pay legal fees, which it expected to top $10 million in the next 12 months. But he questioned if the financial position could have been overstated.

“I’m prepared to accept there’s a risk QN may be placed in administration, but I’m not prepared to accept that the dire consequences outlined in the ... affidavits will flow from QN being placed into administration,” he said.

Justice Tottle also pointed out that in 2013-14 QN was “sufficiently profitable to be able to donate $15 million to the Palmer United Party”.

A CITIC spokesman said the company’s thoughts were with the refinery workers, but it had no commercial relationship with QN.

Mr Palmer and QN director Clive Mensink did not return requests for comment.