Taxpayers left with bill if Clive Palmer’s nickel firm busts

A cash injection of ‘tens of millions’ will be needed to stop Clive Palmer’s refinery going into liquidation.

QLD Nickel

A cash injection of “tens of millions of dollars”, most likely from Clive Palmer’s bank accounts, will be needed to stop his Queensland Nickel refinery going into liquidation as soon as April 30.

Should the money not be raised, and the company collapses, Queensland taxpayers could be left with an unprecedented environmental clean-up bill. The federal government would also be landed with a $30 million bill in workers’ entitlements, and creditors probably would lose their money.

The dire news was delivered by FTI Consulting lead administrator John Park at a creditors’ meeting attended by almost 600 people in Townsville yesterday.

The crowd, made up almost ­entirely of more than 200 recently sacked workers and their supporters, turned out for a briefing on the company’s true financial position but it soon became clear that the administrators were still crunching numbers.

Creditors were warned that it would probably be at least three months before they received outstanding funds and even then, payments would depend on the nickel price and whether the company was able to trade out of its debt, said to be “north of $100m’’.

An ore payment of $4m had been met to ensure continued shipment from New Caledonia to the Townsville port, but everyone else was in for a long wait.

Mr Park later confirmed that administrators had provided an undertaking that outstanding charges would be paid over time to ore suppliers as future deliveries were received.

In a conference call with ­reporters, Mr Park said FTI had identified 1500 creditors and would apply to the courts for a 60- day extension before a second meeting was held.

He said the company had a forecast loss of $50m this year and would not be able to trade beyond April 30 without a bailout.

He also said administrators had spoken to potential investors but suggested it was more realistic for the funds to come from Mr Palmer who “asked we approach him” after the cash shortfall was determined.

While suggesting the “primary driver” of the company’s financial woes was the low nickel price, Mr Park said investigations were continuing into the $21m in political donations the Palmer United Party reportedly received from Queensland Nickel.

Purchases outside Queensland Nickel, he said, including the Palmer Coolum resort on the Sunshine Coast and the self-­proclaimed billionaire’s fleet of planes and vintage car collection, could also be vulnerable.

The Weekend Australian ­revealed last week that only four days before Queensland Nickel slipped into voluntary adminis­tration, two of Mr Palmer’s companies — Waratah Coal and China First — ­applied to be ­secured creditors.

Mr Park explained that Mr Palmer had offered the two ­companies’ support for QNI, and the administrators’ lawyers were probing the complex plan before deciding whether to accept it.

He said Waratah Coal would put up its Galilee Basin coal tenements as security for a bank loan.

However, Mr Park said that Mr Palmer’s estimation of the ­tenements’ value of $250m was at the “upper extreme” of the valuations.