In a desperate bid to save money at Clive Palmer’s cash-strapped Queensland Nickel refinery, management purged safety staff, a court has been told.

July 30, 2019

As Clive Palmer’s cash-strapped Queensland Nickel refinery hurtled towards collapse, management purged safety staff in a bid to slash costs, a court has heard.

The termination of the 237 workers, days before administrators took over the ailing Townsville refinery, left the surviving staff worried the cuts were too deep and fearing for their safety.

But within months, they too were gone when QN slipped into liquidation in April 2016 with the loss of a further 555 jobs.

More than three years on, Mr Palmer is fighting a lawsuit in the Brisbane Supreme Court against liquidators.

They’re trying to claw back about $200 million they say is owed to creditors.

On Tuesday, FTI Consulting liquidator John Park says jobs had to go but the cut of 237 safety and procurement staff on January 15 left the remaining workers reeling.

“I think there was a requirement for the termination of the staff (but) I don’t have a concluded view if 237 was the right number,” he said.

“(After it occurred) there were genuine concerns with the staff, the remaining 555, that the staff cuts were too high and it was compromising safety on site.”

The court heard administrators initially tried to save the failing business but soon found QN’s financial modelling hid the refinery’s dire position.

“Within the first 14 days of the administration, we had what we would call ransom creditors,” he said.

“The funding hole we had provisioned with (QN’s CFO) looked like about $5 million … all of a sudden that had blown out to $10 million.”

Mr Park conceded that a historically low nickel price coupled with a poor exchange rate contributed to QN’s woes.

Earlier, Mr Palmer asked Justice Debra Mullins for leave from the trial to continue briefing his replacement insolvency expert.

The expert is expected to testify that QN wasn’t insolvent before administrators took over the business.

However, the mining magnet’s absence later in the day, when Mr Park was sworn in as a witness, prompted Justice Mullins to raise questions about his whereabouts.

“So Mr Park was a witness Mr Palmer wanted to cross-examine?” she asked.

“Didn’t he subpoena Mr Park?”

A lawyer for the billionaire businessman’s companies, Dr Chris Ward, refused to speak for his boss, but said he didn’t expect to finish questioning Mr Park until Wednesday, inferring Mr Palmer would be in court then to cross-examine the witness.

The trial continues.