Aaron Bunch Journalist with Australian Associated Press | Collection of published work | + 61 484 008 119 | abunch@aap.com.au
Palmer’s QN mining deal too far from port
Clive Palmer’s multimillion-dollar deal between two of his companies and Queensland Nickel days before administrators were called was a dud, a court has heard.
July 24, 2019
Clive Palmer’s Galilee Basin mining assets were too far from a port to be a worthwhile investment when the ailing Queensland Nickel refinery signed a multimillion-dollar deal with the companies, a court has heard.
The deal, which was penned as the Townsville refinery hurtled towards collapse in early 2016, has become the focus of lawsuit being fought in the Brisbane Supreme Court.
Liquidators are chasing the mining magnate for about $200 million they say was owed to creditors when the refinery was shut down by administrators in early 2016.
A team of special liquidators is also tasked with recovering almost $70 million in taxpayer funds used to cover unpaid entitlements to about 800 workers.
The court has heard that despite QN’s precarious financial position in the days before administrators were called, the refinery signed deals worth $235 million with Mr Palmer’s Galilee Basin mining assets, China First and Waratah Coal.
US mining valuations expert Richard Marston, who was the co-author of a report scrutinising the two companies, says the undeveloped mining assets had a value of about a $1 when the deal was struck.
“The problems is this project was a mega-project a long way from a port,” he said.
The prices of coal were too low and the market was too depressed, he said.
“That period of time was among the worst in the coal industry … I don’t think investors would have been interested in this project as of January 2016,” he said.