Manufacturing News

More than 700 jobs in the air ahead of potential refinery collapse

The fate of close to 800 workers’ jobs is waiting on news on whether Clive Palmer’s Yabulu nickel refinery will collapse.

The future of the refinery, and its 776 workers, was yesterday put in doubt after Palmer lost a court bid to force his estranged Sino Iron business partner CITIC to provide US$48 million in ‘unpaid royalties’ relating to the West Australian Sino Iron ore project.

This is the latest round of legal back and forth between the two entities, however it is breaking point for Palmer as he claims the outstanding royalties are needed to keep his Townsville Yabulu nickel refinery operational, stating that the business may now enter administration if funds aren’t forthcoming.

Palmer claimed his Queensland nickel business would suffer “irreparable harm” if the funds weren’t available.

Despite this, the presiding judge, Justice Paul Tottle, dismissed Palmer’s request for access to the funding, stating the court was prepared to accept the risk that the nickel refinery could fold.

He went on to say that evidence exists that a bank loan could be sought, but that “the avenues of finance that the bank was prepared to consider do not appear to have been pursued”.

CITIC also stated that Palmer had more funds than he was willing to admit, and he could support the continued operation of the nickel refinery, with its lawyer saying it defied belief that Yabulu would go under unless money was immediately handed over.

Unions have raised concerns for the workers as their future remains uncertain.

"We've all heard the rumours, the town's alive with them," local AWU spokesperson Cowboy Stockham told ABC Radio.

"I just want to hear from the horse's mouth what's going on and, you know, just where to from here."

Despite the denial of funding for the Yabulu nickel refinery, CITIC said its thought were for the now uncertain workers.

“Our commercial relationship is with Mineralogy alone,” a CITIC spokesperson told

“How Mr Palmer chooses to spend this money and how he chooses to manage his other ventures — whether it be golf courses, nickel mines, soccer teams, the Titanic 2 or robotic dinosaurs — is a matter for him.”

These back and forth court battles have gone on since 2012, and relate to claims of unpaid royalties and misappropriation of funds, and has seen heated arguments in public and mining rights being terminated.

The project initially saw serious delays and was unable to meet a range of pre-arranged targets and royalty payments, with CITIC stating at the time that the lack of Australian experience for its Chinese lead contractor MCC was partly to blame for the delays and,

The relationship between Palmer’s Mineralogy and CITIC Pacific took another turn over the issue of mining royalties.

This series of events prompted Palmer to try and pull out of the agreement, in which he owned the land and gave CITIC Pacific mining right, until Mineralogy was awarded royalties.

However this was vetoed by the WA Supreme Court.

The issue of royalties again reared its head after Palmer claimed the Chinese miner was finally paying him royalties, to the tune of $500 million.

“We have a standard right-to-mine agreement,” Palmer said at the time.

“In the agreement it says they pay a royalty when ore is taken. We would say that word ‘taken’ means when you mine it — they would say it means when you take it from Australia.”

The focus of this ongoing battle between the two companies then turned to the control of Cape Preston and control of the rights to the land.

It then shifted once more to agreed upon royalties, once again, as the iron ore price plummeted to below US$40, bringing down the return on royalties.

Since these initial blowouts disagreements have flared between CITIC and Palmer's company, with the Australian billionaire famously accusing the Chinese firm of 'raping' Australian resources, and then filing numerous court applications to force CITIC into liquidation.

The two have also fought civil cases against one another, claiming both have engaged in corrupt business practices.

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