Clive Palmer planning new coal venture

Clive Palmer has flagged plans to take advantage of rising coal prices by building an open-pit mine.

Clive Palmer wants to build an open-pit coalmine within the boundaries of his cattle station in Queensland.

Clive Palmer has flagged plans to take advantage of rising coal prices by building an open-pit mine within the boundaries of his Mamelon cattle station, which administrators were unable to sell at auction to pay his debts.

Queensland Nickel liquidator FTI Consulting has blamed dealings around the coal tenements for hampering attempts to sell the cattle station, and has disputed Mr Palmer’s claims that Queensland Nickel has no claim over the tenements.

Before recent surges in coal prices, FTI described the tenements as potentially worthless.

Eight months after almost 800 workers lost their jobs in the collapse of the Townsville nickel ­refinery under $300 million worth of debts, two of Mr Palmer’s other companies, Fairway Coal and Styx Coal, have submitted documents to the federal ­Environment Department declaring their intention to build the Styx coalmine, between Rockhampton and Mackay, to export thermal and coking coal.

If approved, construction is slated to start in about a year and first production is targeted for the second quarter of 2018.

Since the start of this year, coking coal prices have surged 200 per cent to $US238 a tonne and thermal coal is up 80 per cent to $US90 a tonne, largely as China has clamped down on overproduction.

Mr Palmer’s plans involve a first-stage mine that would produce two million tonnes of coal a year, increasing to five million or 10 million tonnes after the first two years.

A new train loader would be built to connect to the existing north coast freight and passenger line, where coal would be taken to the Dalrymple Bay coal terminal south of Mackay for export.

About 200 workers would be needed to build the project and between 250 and 500 will be needed to run it.

Mr Palmer could not be reached yesterday and the head of his Waratah Coal company, Nui Harris, who also sits on the board of Fairway, declined to comment on how much the mine would cost or how it would be ­financed.

FTI managing director John Park, who was appointed as Queensland Nickel administrator in January and liquidator in April, was unavailable for comment yesterday.

In his April report to creditors, Mr Park said Queensland Nickel owned 80 per cent of the Styx Basin coal joint venture between Fairway and Styx but that this was disputed by Mr Palmer.

The April report said dealings around the coal tenements had hampered the sale of Mamelon, a 6.3ha beef cattle grazing property 115km northwest of Rockhampton that was passed in at auction on March 23 after receiving a maximum bid of $1.5m. The property was bought by QN parent QNI Metals in 2010 for $8.25m.

Mr Park said that at the time of FTI’s appointment, he was advised that no agreement over how landholders would be compensated if a mine were built had been struck between the mining interest holder and QNI Metals, also owned by Mr Palmer.

But hours before a first auction, scheduled for March 18, FTI was advised agreements had been executed that were not favourable to the landholder. The subsequent auction did not meet the reserve price.

Mr Palmer denies all wrong­doing in the collapse of Queensland Nickel, whose sole director at the time was his nephew Clive Mensink, who is also a director of Fairway and Styx.