The Palmer Nickel and Cobalt Refinery in Yabulu near Townsville may have a future if the nickel price picks up, according to management, as the Queensland government and the refinery's owner, Clive Palmer, continue talks over its fate.
Queensland Treasurer Curtis Pitt met with Mr Palmer at the government's executive building in Brisbane earlier this week.
Mr Pitt said the government had met with the company "numerous times" to discuss its position.
"Now, a few weeks before Christmas, [Mr Palmer] has come back threatening to close the business if the state doesn't bail him out," Mr Pitt said.
But Mr Palmer blasted the Queensland government for not acting as guarantor for a bank loan.
“The Managing Director of Queensland Nickel, Clive Mensink, informs me that as a result of the low nickel price of approximately $3.50 a pound, the company is experiencing a small deficit in cash flow," Mr Palmer said in a statement.
"Just like many companies with a strong balance sheet and small cash flow deficit, Queensland Nickel (the operator of the refinery, also owned by Mr Palmer) approached the four major Australian banks for assistance,” he said.
"Despite unencumbered assets of nearly $2 billion, it was denied a $35 million overdraft by the four major Australian banks. I have been informed Queensland Nickel was told that in the current investment environment they would not lend to a resources company.
"Queensland Nickel's balance sheet is strong, but banks are not supporting the resources sector, which is in a downturn cycle, as a matter of policy and this is a major problem. This should therefore be a matter of concern for both the Queensland and federal governments."
Mr Palmer said that at "no time did Queensland Nickel request taxpayer funds, only a guarantee from the Queensland government".
"For security of the guarantee for $35 million, Queensland Nickel offered its balance sheet of nearly $2 billion. In my assessment, this is a risk-free proposition that would ensure the continued operation of the refinery.
He said not a single job needs to be lost at the Townsville refinery if fairness and common sense prevails.
“Six years ago when I took over the refinery, the then Premier Anna Bligh did everything to encourage me to buy it and my personal intervention in 2009 when BHP was going to close the refinery saved thousands of jobs and the Townsville economy.
“In the last six years the workforce has been exceptional in its efforts to bring the facility up to world class standards and create a debt free business with a strong balance sheet.”
