Answers needed from Palmer over Queensland Nickel collapse

Clive Palmer’s collapsed refining company Queensland Nickel (QNI) is facing extreme levels of scrutiny from government, industry groups and the media, with workers left short changed on redundancy benefits, and fears that taxpayers will be forced to pay for the site rehabilitation.

It was reported by The Australian that only a day before 237 refinery workers were sacked, Palmer’s other companies, China First and Waratah Coal, lodged claims on the Personal Property Securities Register to become secured creditors of QNI.

Only 10 days before those claims, QNI CEO and sole director Clive Mensink was replaced as office-bearer for China First and Waratah Coal by Palmer’s wife Anna.

The move was described as a “desperate attempt to shore up the companies interests ahead of unsecured creditors”.

With rail operator Aurizon owed $20 million by QNI, the sacked refinery workers are also up in arms over being denied access to their redundancy payments.

Palmer also wrapped up his company Palmer Aviation last Friday, with one of the major creditors understood to be a bank which will sell one of Palmer’s private planes.

The situation for the workers has attracted pledges of assistance from government, with Federal Employment minister Michaelia Cash announcing a $500,000 retraining package for workers, while Queensland Premier Annastacia Palaszczuk has fast-tracked $125 million worth of public works in order to create 430 jobs in the Townsville region.

The Australian Workers’ Union (AWU) has said QNI does not have the cash to pay out workers’ entitlements and is three months behind in superannuation payment, after meeting with administrators FTI Consulting on Monday.

AWU secretary Ben Swan said the union had been told the company was $70 million in debt.

"The administrators have confirmed that for the 237 workers made redundant last Friday, the company is not in a position to pay out their entitlements at this point," he said according to SMH.

"It was also confirmed the company hasn't made superannuation contributions on behalf of any employees since November – not just compulsory contributions but also voluntary ones workers themselves have made out of their own pay.

"Because this is a private company, it has been impossible for us to demand, to inspect the financial statements and accounts. There was no mechanism to do that."

Member for Herbert Ewen Jones said he believed the Yabulu Refinery still had a future, but that the finances of QNI needed to be investigated due to revelations by the ABC that the company had donated more than $21 million to the Palmer United Party over the past two years.

"The nickel price has been down for the last three years and Queensland Nickel has continued to make donations to Palmer United Party," he said.


"I think there should be some form of forensic examination of their books. I think we should go through and find if there has been anything illegal done."

On top of all this, cleanup bills for the Yabulu site have been estimated at $25 to $40 million by government sources, while former owner BHP said the site rehab could cost upwards of $100 million, while Queensland opposition say it could cost more than $300 million.

The state environment department has revealed it does not hold any environmental bond for the refinery site “because financial assurance is not applied to businesses of this type”.

The company has specific obligations to rehabilitate its tailings dams, which are located on the edge of the Great Barrier Reef World Heritage Area and contain high levels of ammonia and other compounds.

Townsville Mayor Jenny Hill has voiced her concerns that without staff on site the plant will become a risk to the Great Barrier Reef.

"While the plant is operating we have people on site and part of their role is to maintain the assets," she said this week.

"If the plant wasn't operating there is a greater risk for the reef and the environment."

The Queensland Environment Department said the environmental authority for QNI cites requirements for the company to restore disturbed areas to be "safe to humans and wildlife", however AFR reported that six months ago QNI decided it did not need to completely clean up the Townsville site, with restoration only required to suitability for “industrial use”.

The BRW Rich List last year estimated Palmer’s net worth at $1.4 billion, while the magnate has previously said QNI had unencumbered assets of $1.9 billion.

The price of nickel is currently down to $US8500 per tonne, close to an all-time low (in relative terms) since the 1970s.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.