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Palmer's business empire set to crumble after failing court action in Australia

Xinhua, December 8, 2015 Adjust font size:

The empire of Australian businessman turned politician Clive Palmer is set to tumble after a last ditch court action failed overnight which will potentially force his Queensland nickel mine into voluntary administration on Tuesday.

Palmer's Mineralogy failed to win an urgent court action in the West Australian Supreme Court late on Monday to force his estranged business partner CITIC Group to pay a 48 million U.S. dollar advance on disputed royalties from a joint iron ore project.

Mineralogy argued it and five other entities, including Palmer's Queensland Nickel Pty Ltd would suffer "irreparable harm" if the request was refused as lawyers detailed the deep financial stress within the self described billionaire's businesses.

"I'm not satisfied on the evidence ... that the start alternatives, namely grant the injunction or let Queensland Nickel suffer dire consequences, reflect an assessment of all options that one would expect to be considered when a major business is experiencing financial difficulties," Judge Paul Allan Tottle wrote in his decision late on Monday.

The Queensland Nickel mine could be placed into voluntary administration as early as Tuesday as Palmer needed the royalties to save the business.

Palmer's lawyer described the financial position of the businessman turned politician's empire as "worse than perilous" and said Mineralogy was struggling to pay its legal fees in actions which would cost an estimated 10 million Australian dollars (7.26 million U.S. dollars) over the next 12 months.

CITIC's lawyer had questioned how Mineralogy could request part payment of a royalty that had been under dispute for some time, which is due to be heard again in court in late 2016, without exploring other options.

Mineralogy's lawyer however claimed Australia's major financial lenders had rejected requests for loans, which again was disputed by CITIC's lawyer who questioned how a company with a 1.9 billion Australian dollar (1.38 billion U.S. dollar) balance sheet and minimal debt could not secure funding.

A spokesman for CITIC Pacific told reporters outside the court the company's thoughts were with the workers of the Nickel business; however the future of the mine was not CITIC's responsibility.

"Mr Palmer is responsible for how he spends his money and his business decisions," spokesman Rob Newton said.

"Over recent years, those decisions have included golf courses, they've included soccer teams, nickel mines, Titanic 2 and robotic dinosaurs."

Union representatives are set to meet with the mine's management on Tuesday to determine the fate of some 700 workers at the mine, one of Australia's largest with a capacity of 35,000 tonnes per year.

"We've heard all the rumours, the town's alive with them," Australian Workers' Union spokesman Cowboy Stockham told Australia's national broadcaster.

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

Xinhua has contacted Mineralogy and Queensland Nickel for comment. Endit