Clive Palmer has opened negotiations with a key creditor of his failed Queensland Nickel refinery near Townsville, the first verifiable move to get the plant back up in tandem with his bid to return to national politics.
The rich-listed businessman had “positive discussions” to settle a $1 million debt to the state-owned Port of Townsville, the terminal operator said.
Securing access to the port is an important precondition to resuming production at the Yabulu site — as Mr Palmer has repeatedly promised — despite entrenched scepticism about his intentions and ability to follow through.
Investigations by The Weekend Australian show it is possible for Mr Palmer to sidestep the liquidation of the company that ran QNI before it collapsed with the loss of nearly 800 jobs in 2016, devastating the Townsville economy. And the Queensland government said environmental approvals for the mothballed refinery remained in force, with recent inspections affirming it was “in compliance”. Mr Palmer has said he will contest the Townsville-based seat of Herbert for his United Australia Party in May’s federal election. For months, he has flooded local airwaves with ads blaming the liquidators for folding QNI, part of a pricey national blitz for the UAP that has been conspicuous during broadcasts of the Australian Open tennis tournament.
While the debt to the Port of Townsville is only a fraction of the $300m alleged to be owed to QNI’s sacked workforce and other creditors of Queensland Nickel, the plant’s former operating company, settlement of that dispute and flow-on legal action with international mining house Glencore is central to any restart.
Queensland Nickel defaulted on lease conditions at the port by failing to pay harbour fees and lost access to a berth it shared with Glencore, cutting its supply line of nickel ore from New Caledonia and Indonesia.
But a conveyor system and rail-mounted ore handler are still in place, despite legal action by Glencore to remove the equipment.
Through another subsidiary, Queensland Nickel Sales, Mr Palmer is pressing to restore port access. “The port is having positive discussions with QNS about recommencing nickel ore imports through Townsville Port,” the authority said.
“The nature of those discussions is confidential. QNS is in discussion with Glencore in this regard.”
The Swiss-based miner declined to comment yesterday, citing ongoing legal action against Mr Palmer to claw back about $2m in leasing fees and costs arising from its inability to use the berth for the past two years.
The attraction of reopening QNI has been sweetened by the nickel price, which has climbed to $US11,540 ($16,293) a tonne, a 36 per cent increase on what it was at the time of the refinery’s shutdown. Cobalt produced by the refinery is also in demand.
If Mr Palmer nominates for Herbert, the country’s most marginal seat, returning QNI to production would help restore his battered reputation in Townsville.
But former refinery staff say they don’t trust him after being short-changed on their entitlements. “Hell no,” said Angie Bramwell, who ran a food bank for QNI workers when her husband, Shaun, was laid off.
“How can you trust him? The dude presents a very good impersonation of being insane, when in fact all his actions towards us have been calculated. What he did to my family was very dishonourable.”
Mr Palmer’s room to manoeuvre owes much to the corporate structure he used at QNI. By vesting the assets in two other companies, QNI Metals and QNI Resources — leaving the liquidator to go after Queensland Nickel — he could theoretically start up without being encumbered by the liquidation proceedings.
Another potential obstacle, sourcing a new ore supply, seems surmountable. Resource engineering expert Gavin Mudd of RMIT University said there was a “very large amount” of nickel laterite ore in the western Pacific, including in New Caledonia. But miners there will not automatically jump at the opportunity to resume shipments to QNI, having suffered when it stopped importing in 2016.
Mr Palmer, who held the Sunshine Coast seat of Fairfax for his now-defunct Palmer United Party for a term from 2013-16, would not say when production would resume or go into further detail about his plans.
