New Caledonia warns of violence over Palmer’s Queensland Nickel

Clive Palmer has been warned by the New Caledonia President that a shutdown of his nickel refinery would be disruptive.

(FILES) A file photo taken on August 27, 2013, shows Australian billionaire Clive Palmer speaking during an interview with AFP in Sydney on August 27, 2013. Palmer was dealt a blow late on December 8, 2015 in a long-running court battle with Chinese conglomerate CITIC after a court rejected a 35 million USD (48 million AUSD) payment, threatening the collapse of a key nickel refinery. AFP PHOTO / FILES / William WEST

Clive Palmer was personally warned by the President of New Caledonia that a shutdown of the federal MP’s Townsville nickel refinery would cause “social and political disruption” and even ­violence in the island nation.

Just days after the Queensland government formally rejected a request to bail out the refinery, sworn affidavits show Mr Palmer met New Caledonia’s Philippe Germain and other political figures last month, with the leaders expressing concerns about the ramifications of a shutdown.

The future of the refinery — which sources most of its nickel ore from New Caledonia — and the jobs of its 767 workers is under a cloud, running at a loss and struggling to meet bills.

Clive Mensink, Mr Palmer’s nephew and the sole director of Queensland Nickel, has sworn the refinery would be closed and the workers sacked this month should the business fail to win new funding.

On Friday night, Queensland Treasurer Curtis Pitt wrote to Mr Palmer and Queensland Nickel to formally reject a request for the state government to guarantee a $35 million loan that the company claims would allow the refinery to remain in operation.

In an affidavit, Mr Mensink said Mr Palmer had met with Mr Germain, the President’s mining adviser Phillip Petre, the president of congress, Thierry Santa, and French high commissioner Vincent Bouvier on or around November 4.

“I am advised by Mr Palmer … that they expressed their concern as to whether QN would continue to buy ore and that the failure of QN to be in a position to do so would result in political unrest, violence and even closure of mines in New Caledonia, as QN has been the sole purchaser of laterite nickel ore for the last 20 years,” Mr Mensink said.

The refinery is the nation’s biggest single customer.

The refinery was expecting to buy $152.8m worth of nickel ore from New Caledonia in the current ­financial year.

Mr Mensink estimated there were about 500 people in New Caledonia working on the mines that sourced QN’s nickel supply.

“These people would lose their jobs if QN stopped buying nickel from New Caledonia,” he said.

According to the affidavit, Mr Palmer told Mr Mensink that the New Caledonian politicians had said that QN’s ongoing purchase of nickel ore was “very important for good trade relations between Australia and New ­Caledonia and peace in the South Pacific”.

New Caledonia, a French overseas territory that sits 1470km northeast of Brisbane, hosts around a quarter of the world’s known nickel deposits.

The price of nickel has fallen to its lowest levels in a decade amid signs of a cooling Chinese economy.

Queensland Premier Anna­stacia Palaszczuk yesterday defended the decision of her govern­ment not to intervene in Queensland Nickel, saying that it would set an “alarming precedent’’ for the state government to effectively bailout a private company.

Ms Palaszczuk also accused Mr Palmer and Queensland Nickel of not being “upfront’’ with their financial disclosures to the government.

“The government is not in the business of giving guarantees to private companies,’’ she said.

“That would set an alarming precedent with every other private investment company in Queensland.’’

Mr Palmer now had a “moral obligation’’ to be honest with workers at his refinery, Ms Palas­zczuk said.