Call for govt to buy Palmer's nickel plant to save jobs
THE State Government should trade debt for equity and take over the running of Queensland Nickel Industries before eventually selling it off at a later date, says former Palmer United Party state leader Alex Douglas.
He quit PUP after a falling out with Clive Palmer in mid-2014 and went to the last election in 2015 as an independent, losing his seat of Gavin on the Gold Coast.
He said a template exists with the Queensland Government doing the same thing when Alan Bond struck trouble, running the business for four years before on-selling at a profit to BHP.
Dr Douglas said that approach, which could cost the government up to $40 million a year in the short term, should be repeated.
He said the consequences for Townsville of the business closing; a possible outcome if creditors determine that next week, would be disastrous.
At risk are 550 remaining jobs after 240 were let go last week and the flow-on benefits to a host of other North Queensland businesses that service the Yabulu mine.
Mr Palmer claims he has spent $4 billion in North Queensland since 2009 supporting 1500 workers in addition to the nearly 1000 that had been employed at the plant.
He says the business is worth $1.3 billion in economic activity annually in Townsville alone.
Those numbers may create headaches for the Palaszczuk Government but former Cabinet officer and barrister Peter Bridgeman does not think that will prompt anything but an orthodox response.
QNI debts hover around $70 million, of which $27 million is owed to the partially Qld Government owned rail business Aurizon and an unknown sum to the wholly owned government business Townsville Ports.
The nickel refiner is the port's biggest customer.
Between them, the two government-linked businesses are likely to control the first creditors' meeting of QNI to be run by administrators FTI Consulting late next week.
If they choose to liquidate the business, Mr Palmer will be in a position to say the government could have saved it with a $30 million line of credit but instead chose to destroy it.
But Mr Bridgeman said: "It's not the government's job to pick winners and losers. What happens at the creditors' meeting will be a different dynamic."
Mr Bridgeman said the scenario was being played out while Glencorp was quietly making significant reductions to its Queensland Copper operation.
With the government facing the prospect of considerable income support for more than 770 workers, he said Mr Palmer may be able to engineer a deal.