Billionaire Palmer acquires BHP refinery

GOLD Coast billionaire Clive Palmer has acquired the Yabulu Nickel Refinery near Townsville from BHP Billiton for an undisclosed sum.

Professor Palmer secured the $2 billion asset from BHP Billiton through his private businesses, Nickel House Pty Ltd, Nickel Process Pty Ltd and Nickel Consolidated Pty Ltd.

The refinery is located about 25 kilometres northwest of Townsville. Exporting around $600 million a year, the refinery is regarded as a vital component of the region’s economy having operated profitably for more than 35 years.

“This is a company that is capable of turning up to $700 million in profits in a good year. It was a good proposition for us; we have been negotiating since December last year,” Palmer told Gold Coast Business News.

The acquisition includes the refinery, which is situated on 2500 hectares of freehold land, as well as the berth and ore handling facilities at the Townsville Port.

The deal has sweetened Palmer’s public tumultuous relationship with Queensland Premier Anna Bligh. Palmer complimented the Queensland Government for its support during the purchase of the facility.

“Just because you have a different political view, it does not mean you can’t recognise a person’s contribution,” says Palmer.

“Even though there was no financial contribution by the government, the Premier showed compassion to the Townsville community and was very committed to the project.

“Allowing the transaction to proceed in such a short period of time was of great assistance to us. The Queensland Government has for a long time been publically supportive of jobs for Queenslanders and on occasion they have delivered.”

The refinery employs 1000 employees and produces around 35000 tonnes of nickel and 2500 tonnes of cobalt per annum. The refinery has further production capacity of around 40,000 tonnes of nickel and 700 tonnes of cobalt. The nickel is sold in Japan, Korea and Europe making it a worldwide business, with ores sourced from third party mines in New Caledonia, Indonesia and Philippines.

“Approximately 2900 indirect jobs in the Townsville area will also benefit as well as the jobs of those people in New Caledonia, Indonesia and the Philippines who depend on the plant’s operation for continuation of their mining activities,” says Palmer.

Palmer, the ostentatious jet-setting billionaire and owner of national soccer club GC United is confident nickel prices will return despite having a lousy year in 2008.

“While many companies are facing economic uncertainty we are seeing many good opportunities. This acquisition is a good strategic fit into our nickel asset portfolio with future expansion opportunities. Despite nickel prices being down Yabulu is still profitable,” he says.

“This world class plant is efficient and still has the opportunity to be expanded. I’m delighted that the refinery will now be 100 per cent Australian owned and for the first time in its history will be wholly owned by a Queenslander.

“We’ve got everything covered. Our view is that man made the current economic instability and man can fix it as well.”