One former Queensland Nickel worker says he is owed about $30,000 by the company. Photo: Glenn Hunt Clive Palmer’s nickel refinery outside Townsville. Photo: Glenn Hunt
Pundits are predicting the demise of the Palmer United Party as Queensland Nickel workers weigh up their futures. Photo: Daniel Munoz
Clive Palmer in federal parliament. Photo: Andrew Meares
Palmer defiant after refinery business failure
Townsville is in uproar, but Clive Palmer has gone fishing.
Or so he told Fairfax Media on Thursday morning, saying he was off to chase marlin around Queensland waters and might not be back for several days.
If he was feeling guilty about savoring the pleasures of the very rich while hundreds of refinery workers at his wholly owned North Queensland nickel plant sweated on their futures, he’s showing no signs of it.
He conceded, briefly, that the plant’s decision to dismiss 237 workers a week ago was a “tragedy” .
But on Planet Clive, everyone and everything else is to blame for the woes of his Yabulu nickel plant except, it seems, Palmer himself.
In an extended interview (the only one he has given this week) he variously blamed the plunging nickel price (undisputed), the short-lived carbon tax, the banks for not lending him money, and the Queensland government for not agreeing to guarantee a $35 million loan that he says the banks might otherwise have been willing to extend.
He also points an enraged finger at the Chinese state-owned company CITIC, his estranged Sino Iron business partner, which has refused to cough up tens of millions in disputed royalties he asserts should have been flowing to his flagship company Mineralogy from a $12 billion iron ore development at Cape Preston in Western Australia. (The legal battle between Palmer and CITIC has raged for three and a half years and shows no sign of being resolved any time soon.)
So what of demands that Palmer repay the more than $20 million he pulled in recent years out of Queensland Nickel Industries, the nickel plant’s operator, to bankroll his Palmer United Party? Or that he raid other corners of his larder to keep the refinery going?
Little chance, it seems.
“I’ve already put tens of millions of dollars in there and I’m not a charity” Palmer protests. “I’ve got a wife and family… you don’t ask BHP shareholders to tip in their house or something when something goes wrong, its not a realistic question in this sort of business.”
He says he took the nickel refinery over from BHP in 2009 when it was about to go under and made it “completely solvent.” He argues that the donations the refinery business made to his Palmer United Party were instead of paying himself annual dividends, and that they made business sense because “Palmer United …[ was ] set up with the object of abolishing the carbon tax” and the company would have been paying $25 million a year in carbon tax if the PUP hadn’t helped shoot it down in the Senate in July 2014, back in the heady days when it still boasted three senators.
“I made a conscious decision not to spend that money on myself, on a luxury yacht or an overseas trip, but in trying to support a political party that if it was successful in its goals would mean that our workforce would continue to operate. I don’t know any other chief executive that would give up his job and career, go into the madhouse of parliament to fight for his workforce to maintain the operations of his business. I don’t think I could have done more than I did.”
Clive Palmer as a martyr? Its a hard act to pull off, with 550 remaining refinery workers and their families now wondering how long their jobs will last and the sacked workers wondering how they are going to make their next mortgage and rent payments.
And its not clear how ongoing donations to PUP – including more than a quarter of a million dollars sometime last year, long after the carbon tax had been repealed – could have been justified, even on Palmer’s logic.
But the Palmer hide is legendary, as thick as that of the dinosaur replicas which he has scattered over the grounds of his near-dormant Coolum resort on Queensland’s Sunshine Coast.
As PUP’s former Queensland parliamentary leader Alex Douglas puts it, “Clive loves the notoriety, he likes being on the front page. He doesn’t have a fear of failure and he doesn’t care whether you are saying good things or bad things, as long as you’re talking about him.”
Voluntary administrators FTI Consulting took over the nickel business on Monday from its manager, Palmer’s nephew Clive Mensink, and are poring over the books ahead of the first creditors meeting late next week. It appears QNI has racked up close to $70 million in debt, with the unpaid entitlements of the sacked workers alone standing at between $14 and $16 million.
The Australian Workers Union Ben Swan says the sense of betrayal among workers is profound, as he twice sought assurances from the company in December that adequate provision had been made for their entitlements.
Yet Palmer insists that the fate of the workers is not on his head because “the administrators made that decision not to pay them out….I just observed what happened, Mensink briefed me after it happened.. ..[and] by making those people redundant, as bad as it was, it preserved the operations of the refinery under administration and kept those other jobs in Townsville going.”
For how long, though, is anyone’s guess.
The Townsville Bulletin reported this week that no nickel ore ships were due to arrive at the berth used by QNI in January or February, and that ore supplies at the refinery could run out on February 4.
Townsville mayor Jenny Hill says the plant is vitally important for the local community. “It turned over 2 billion dollars a year in terms of re-spend through the community, in the peaks it returned a very good profit, but a good operator would have ensured there is enough money put aside for a rainy day”.
She like others, is waiting for forensic accountants to “go through the books and see what really went on.”
Reports are emerging that QNI may have been used as a “cash cow” for other Palmer companies and its no secret that in addition to the unresolved tussle with CITIC, other parts of the Palmer empire are under pressure.
The once-thriving Coolum resort and championship golf course has been semi-mothballed, at least one of Palmer’s private planes is up for sale, his much-vaunted rebuild of the Titanic is on hold, and his Galilee Basin coal interests appear short of cash.
Yet it is extraordinarily difficult to peer inside the maze of his nearly 100 companies, because they are all privately owned by him.
Resources analyst David Lennox from Fat Prophets warns that “If you have a business that is supporting another, ultimately you tend to find that both businesses get dragged down.”
In private companies, he says, there is often “a tendency to move things around and have Peter pay Paul, and Paul pay Peter and its difficult to follow the chain of where things end up because you don’t have to tell anyone. Public companies come under far more scrutiny.”
Palmer went on a spending spree after receiving his initial windfall of over $400 million from his Chinese partners in 2006 but few of those assets appear to have been producing much in the way of income.
But he indignantly rejects suggestions that is struggling for cash, or that his empire is on the brink of collapse. “I ‘m not cash strapped. Not me personally, we are talking about” he insists. “The buck stops with me… and so does the money.”
What about his companies?
“If they want to raise more capital then they can go to their shareholders and ask them for money”.
Do they have shareholders, other than him? ” No, they are private companies” he says, with a logic that might do Alice in Wonderland justice.
Then he adds, “Look, I’m not cash strapped. But let’s say it was all true, for a minute, right? I don’t have any debts. I’m not raising capital, no one is trading any of my shares, right? Why is it anyone’s business what my financial position is? … I’m not Alan Bond, I’m not Christopher Skase, I don’t have any debt to any debtors, BHP has sent out 17,000 redundancies, why do I get all the publicity? … My business empire, whatever assets I own, are set up for one purpose only and that’s to make me happy, and I am happy.”
Palmer is scathing about the Queensland government, which he says sank QNI’s bid for state backing for a bank loan because it was out to “destroy” him politically.
He met with deputy premier Jackie Trad and state Treasurer Curtis Pitt in October trying to convince the government to go guarantor but the talks ran onto the rocks when the government brought in fresh auditors, KMPG, which prepared a confidential report to state cabinet.
Palmer claims the report contained “mistakes” which he won’t elaborate on but which he claims he was not allowed to correct.
Premier Annastacia Palaszczuk has been left trying to rush new capital works into the region to try to head off a collapse of the local economy should the plant go under entirely.
Meanwhile the future of the Palmer United Party – which had been parlous enough after the acrimonious departures of Tasmanian senator Jacquie Lambie and Queensland Senator Glenn Lazarus (now both independent) in late 2014 and early 2015 – will come under further pressure should the revelations from the QNI administrator become more damaging for Palmer.
Palmer managed to win the lower house seat of Fairfax at the last election and says he intends to run again “at this stage.. if I’m not sick or anything.” But few will take that at face value. As one former PUP staffer observes, “he is mercurial. One morning , he could wake up, and its all over, red rover.”
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