21 March 2016
by Mark Ludlow

Clive Palmer scuttles Queensland Nickel property sale

The forced sale of Clive Palmer's Central Queensland cattle property by administrators to help pay debts from his failed Townsville nickel refinery was aborted on Friday after the federal MP tried to enforce last-minute conditions on the sale.

The sprawling 6258-hectare Mamelon Station – which also has significant coal mining tenements – was bought by Mr Palmer's Queensland Nickel for $8.2 million in 2010, but was expected to fetch much less at an auction in Rockhampton on Friday.

However, only one hour before agents Colliers International started the auction, Mr Palmer's representatives told administrators they wanted to enforce new land-use agreements on the property.

This would ensure access to the mining tenements on the property which are owned by Mr Palmer's other companies, not Queensland Nickel which was put in voluntary administration on January 18.

The last-minute intervention by Mr Palmer could also impact on the final sale price of Mamelon Station. The proceeds from the sale were going to be used to help pay the more than $110 million in debts owed by Queensland Nickel.

Colliers International was then forced to delay the auction until Wednesday, March 23, to give potential buyers the time to come to terms with the new conditions.

Mining tenements
"It has very recently been disclosed to us that the current owner of Mamelon has entered into three conduct and compensation agreements with Fairway Coal Pty Ltd and Styx Coal Pty Ltd, who hold mining tenements over the property," auctioneers told potential buyers on Friday.

"Covenants within these agreements may bind a future owner of the property. Despite the property being sold 'as is where is' we consider that it is appropriate each bidder be given time to consider the terms of these agreements."

Fairway Coal is owned by Mr Palmer's parent company, Mineralogy, while Styx Coal is fully-owned by Waratah Coal, one of Mr Palmer's companies which has undeveloped coal assets in the Galilee Basin.

The directors of both companies include Mr Palmer and his closest advisers including his nephew and former Queensland Nickel managing director Clive Mensink and Nui Harris.

Queensland Nickel's parent companies, QNI Metals and QNI Resources, have a majority stake in the Styx Basin coal project, between Rockhampton and Mackay.

The tenement includes 232.2 million tonnes of semi-soft coking coal which Mr Palmer's Waratah Coal spruiked to potential investors in 2012.

Administrators for Queensland Nickel, FTI Consulting, were recently sacked by Mr Palmer from the day-to-day running of the Townsville refinery, but they are still trying to resolve debts from the company which has been hit by a plunge in global nickel prices.

The sale of Mamelon Station and other assets, including trucks and other machinery from the nickel and cobalt refinery, will fall well short of meeting significant debts to big trade creditors such as rail company Aurizon, which is owed $20 million, as well as workers who are owed more than $74 million.

The administrators are yet to receive the final term sheet from Mr Palmer for his $250 million rescue plan for the refinery. Mr Palmer last week announced he had received a $23 million lifeline from a mystery Sydney financier to keep the refinery afloat.

But the remaining 550 workers were sacked from the refinery last Friday after Mr Palmer failed to receive the remaining government approvals to keep the refinery open.

Mr Palmer said the refinery would remain shut until July 31.