Clive Palmer seeks $80m nickel cash

PRIME ministerial aspirant Clive Palmer is confidentially seeking $80 million as a cash advance from a resources company.

PRIME ministerial aspirant Clive Palmer is confidentially seeking about $80 million as a cash advance from one of the world's largest resources companies, amid mounting financial losses and the exit of key staff at his Queensland Nickel refinery, according to claims by senior sources.

Mr Palmer, who says he is a multi-billionaire, has allegedly been asking international trader Glencore Xstrata to pay three months in advance for the nickel product it purchases, to provide cash flow to the refinery near Townsville, the sources claimed yesterday.

Mr Palmer has cut the refinery's maintenance budget and shelved development plans in a bid to reverse losses, which have been compounded by a slumping nickel price and costly operational decisions. "The refinery is in deep trouble and it urgently needs money from somewhere," claimed a high-level source close to Mr Palmer's refinery.

The tycoon, who has launched legal action against Chinese company CITIC Pacific in a bid to be paid disputed royalties from a West Australian iron ore project, said yesterday it was "totally untrue" that he was seeking the funds.

Mr Palmer made a public pledge last month that the refinery could operate for years with any losses funded from his personal wealth, which he has put at more than $6 billion.

"Glencore buy all our nickel, have for years," he said yesterday. "We are not seeking new arrangements with Glencore. We are not seeking to change or vary any agreement. We (are) not seeking to bring anything forward, got it?

"We (are) not seeking any favours from anyone. Sounds like (your) source is Liberal (Party)."

Glencore executive Peter Johnston declined to comment.

The sources said Mr Palmer's high-level request to the Switzerland-based group for cash ahead of nickel delivery had stoked concerns that the future of a significant driver of Townsville's economy was in doubt.

Glencore pays Mr Palmer's company when the refinery's nickel leaves the gate at Yabulu for transport to the port and then overseas. The proposal sought would see Glencore paying for up to three months of future supply, ahead of production.

Several Glencore managers subsequently visited the refinery for three days to conduct due diligence on its prospects. It is understood they were surprised three of the refinery's 12 roasters, fundamental pieces of infrastucture in the nickel process, were out of action, pending maintenance and repairs. A fourth roaster has subsequently failed.

Mr Palmer, who is announcing candidates in every seat across Australia for the federal election while campaigning to make the country wealthier with more jobs, bought the refinery cheaply from BHP Billiton in 2009 and enjoyed stellar profits as the world nickel price recovered.

As demand for nickel dropped and the price halved, tens of millions of dollars in Queensland Nickel's coffers that would have been available to the refinery were spent on loss-making ventures, including the former Hyatt Coolum Resort, a Port Douglas resort, golf courses, and litigation.

Mr Palmer last month launched Supreme Court defamation proceedings against The Australian after it reported his financial situation and revealing a leaked legal letter showing he was demanding about $200m from a Chinese company to stave off the loss of jobs of about 1000 of his staff. An affidavit sworn by Mr Palmer in April showed the refinery lost $58m in the financial year to June 30, 2012, and insiders said heavy losses had continued.

In a public rebuttal on June 24, Mr Palmer told refinery staff: "The misinformation reported in The Australian from extracts of information which were not sourced in an open and proper manner dealt with cash issues current in mid-March. It is a much different story today . . . now I have injected my personal funds to ensure the security of Queensland Nickel and our staff."