Creditors play hardball with Clive Palmer

Clive Palmer’s plan to dodge $100m debts by restructuring his nickel refinery is likely to be thwarted by angry creditors.

Clive Palmer’s plan to dodge $100 million debts by restructuring his nickel refinery is likely to be thwarted by angry creditors ­demanding part-payment before dealing with his new company.

The Australian can reveal voluntary administrators FTI Consulting cancelled every supply contract for the refinery on Tuesday, including Aurizon’s trains that were due to pick up nickel ore from a ship arriving in Townsville’s port this Saturday.

Mr Palmer’s Queensland Nickel Sales Pty Ltd will now be forced to negotiate with angry suppliers, many of whom are still owed money by Queensland Nickel Pty Ltd, Mr Palmer’s under-administration company that operated the refinery until Monday.

The company faces tough conversations with rail group Aurizon, Glencore (from which it buys coal, sells nickel, and leases a port berth), oil supplier Puma, gas ­seller AGL, and chemical seller Ixom, among others.

As it stands, Mr Palmer has no way of transporting the ore from the port to the refinery when the ship docks at the weekend, cruelling the plant’s ability to process nickel and start making money again.

The Australian understands the new company also has not lodged a berthing application for the ship.

A source close to the company confirmed the new manager faced an uphill battle to win over ­“distrustful” suppliers and ­workers.

“The employees and the suppliers need to feel confident that they will be paid,” the source said.

“There’s a level of distrust there.”

One supplier told The Aus­tralian it was not prepared to enter into a new contract without at least some of its outstanding debt with Queensland Nickel Pty Ltd being settled.

“We want the business to continue, but we’re not about to just throw good money after bad,” the supplier said.

An Aurizon spokesman confirmed administrators asked the rail group on Tuesday to cancel all current train orders, effective ­immediately.

“Given the decision by the Palmer Group of companies to ­appoint a new manager of the ­refinery, the rail haulage agreements with the previous managing entity has been terminated,” he said. “Aurizon is willing to engage on new agreements for rail haulage services with the new manager on a commercial basis.”

The Australian revealed yesterday that Queensland Nickel Sales Pty Ltd was operating the refinery without the necessary legal environmental authority, which is still in the name of the previous operating company.

After the report appeared, Queensland Nickel Sales Pty Ltd made an application with the ­Environment Department for an EA and for registration as a “suitable operator”.

“The Department of Environment and Heritage Protection is looking to have these appli­cations processed this week,” a dep­artment spokesman told The Australian.

The refinery’s remaining 550 workers are still waiting for written employment offers from the new management company.

Company records show Queensland Nickel Sales Pty Ltd has already shed a director.

James McDonald, Mr Palmer’s chief of staff, serial Palmer United Party candidate and Titanic II marketing director, was removed as a director on Sunday, but ­documents were lodged only on Tuesday.

Mr Palmer’s nephew, Clive Mensink, is now the sole director.