Clive Palmer opens the books in scramble for funds

The WA government will gain an intimate look at the inner financial workings of Clive Palmer’s troubled business group.

Clive Palmer in Question Time in the House of Representatives Chamber at Parliament House in Canberra. Pic by kym Smith Pic by kym Smith

The West Australian government will gain an intimate look at the inner financial workings of Clive Palmer’s troubled business group, amid concerns about the future of a $12 billion iron ore project.

Lawyers representing Western Australia applied successfully this week to the Supreme Court to see legal documents and confidential affidavits believed to detail the finances­ of Mr Palmer’s key companies, Mineralogy and Queens­land Nickel.

The federal MP’s companies submitted the material as part of an urgent upcoming trial aimed at securing cash from his estranged Chinese business partners.

In calling for the fast-tracked trial on Tuesday, Mr Palmer’s lawyer Simon Couper QC told the West Australian Supreme Court the businesses were facing an imminent­ “drop-dead date”, in the latest ­indication of growing financial pressure within Mr Palmer’s corporate empire.

Lawyers representing the state told the court there was a concern about threats from Mineralogy to force China’s Citic to stop mining at the $12bn Sino Iron project in the Pilbara region. Sino Iron is governed by an agreement ­between Citic, Mineralogy and the state, and includes clauses that require the mine to remain in continuous operation.

The state’s application to ­see the documents was not opposed by Mr Couper, and the state will study the documents and weigh up whether to join next week’s trial as a party alongside Citic.

The state agreement contains clauses detailing the rights of the state to terminate the deal in the event a party falls into default or liquidation, although the financial strength behind Citic and the government’s desire to see the Sino Iron project continue means it is unlikely that any financial troubles within Mineralogy would prompt termination.

Mr Couper said Mineralogy would try to halt mining at Sino Iron only should it fail to secure any cash from Citic.

“We’re proposing that we should be paid money, and that mining ceases only if that money is not paid,” he said.

The push for cash is the latest in a string of worrying signs from Mineralogy. Mr Palmer recently put his Cessna Citation private jet up for sale with an asking price of more than $7 million, while he has raided the coffers of resources company Gladstone Pacific and the body corporate at his Coolum ­resort.

Mineralogy also held ultimate­ly failed talks with the Queensland government over $25m in emergency assistance.

Mr Palmer was tight-lipped about his financial situation yesterday, after The Australian revealed the looming prospect of a “drop-dead date”, with the MP cancelling a press conference.

Speaking publicly about the matter could jeopardise his efforts to keep the financial affidavits confidential, while any assurances about the financial health of his business could complicate his legal team’s push for a speedy hearing.

Mr Palmer’s company made a similar attempt at securing an interim payment from Citic late last year, but it took six weeks for the court to hand down its decision.

Chinese state-owned Citic paid Mr Palmer $US415m in 2006 for the rights to two billion tonnes of iron ore at the Sino Iron project.

Mr Palmer was also entitled to two forms of production royalties, but the largest of the two royalties is embroiled in an ongoing dispute over how it should be calculated.

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