2018 AFR Rich List: Clive Palmer is back and has his eye on top spot
Clive Palmer is known for his outlandish statements.
Be it political conspiracies, supposed media witch hunts or the Chinese government running a smear campaign against him, Palmer is not afraid to shoot from the lip. He's even recently put billboards up in several cities adorned with the message: "Make Australia Great".
Add another claim: Palmer says he could well be Australia's richest person.
Clive Palmer even recently put billboards up in several cities adorned with the message: "Make Australia Great". Peter Braig
Palmer has been a member of the Financial Review Rich List for 11 years, but in 2017 he very nearly fell off. Then, with his wealth estimated at $344 million, he snuck in at 198th.
For Palmer it was the culmination of a tumultuous period in which he was embroiled in a lot of court actions, even by his standards. These included his Queensland Nickel being placed in administration and having his main source of wealth, royalties from the huge Sino Iron project in Western Australia's Pilbara, put in doubt.
This year, following a huge court win in January against the mine's operator CITIC Pacific, Palmer is back among the top echelons on the Rich List, rejoining the billionaire ranks.
So important is that legal victory to his fortune that Palmer's wealth is now estimated at a whopping $2.84 billion, which will make him the biggest mover on the Rich List when the 2018 edition is published in The Australian Financial Review Magazine next Friday, May 25.
'How much money does a bloke need?'
Yet the Gold Coast investor believes he could be worth a lot more. This is mostly thanks to that royalties agreement he first struck with CITIC in March 2006, as well as a host of other assets – some of which are bound to be even more controversial.
"It's a $12 billion mine and I could be getting up to $US400 million each year in royalties if they are paying at $10-11 per tonne," Palmer tells AFR Weekend about Sino Iron, which is in a region of the Pilbara where his private company Mineralogy first secured mining permits in 1985.
"I got a cheque for about $350 million from them earlier in the year and recently got a quarterly one of about $65 million or so. That mine has got a long life, too. But how much money does a bloke need? All you really need is enough to take your wife to the movies and the family bowling. That will do me."
Yet Palmer, 65, quickly offers up other assets as proof he's potentially got far more wealth to be unlocked over the next decade or two.
"For a start there's about $6 billion worth of cobalt in the tailings dams in Townsville owned by Queensland Nickel," he says. "I've got a big project in the Galilee Basin [in Queensland] that could produce more coal than Adani's nearby mine.
"Then there's another one that would produce coal, less quality, in the Styx Basin. I've also got approval for 2000 housing units on the Gold Coast. And I've got golf courses in Bora Bora and other property in Queensland."
So is Palmer on his way to be being Australia's richest person if all his mining plans come to fruition? "I think so. Looking at it rationally and if you look at the cashflow. It just depends on how you are going to value that."
He is particularly excited about the tailings dam at the Townsville refinery. But as seems often the case with Palmer, the situation is complex. And that is putting it mildly.
The situation is complex
Queensland Nickel is the major source of consternation. Eight years ago Palmer was flying high, giving away $10 million to staff at the Yabulu nickel refinery in Townsville and BMWs and Mercedes for Christmas.
But Queensland Nickel would go on to collapse in 2016 with $300 million of debts, putting Palmer's business career at risk and hundreds of employees out of work. Liquidator FTI Consulting is investigating the collapse and what role, if any, Mr Palmer had in it.
Palmer says he could well be Australia's richest person. Glenn Hunt/AAP
He was not listed as director at the time and has denied wrongdoing. Meanwhile, Palmer's nephew, Clive Mensink, has been overseas for two years, frustrating liquidators keen to question him given he was once Queensland Nickel's sole director.
The matter is now subject to legal action, with Palmer applying for the removal of Queensland Nickel's federal government-funded special purpose liquidators, PPB Advisory, and for only the general purpose liquidators, FTI Consulting, to remain.
Palmer, a one-time federal MP whose Palmer United Party had the balance of power in the Senate in 2014, has also reportedly lodged documents in the Queensland Supreme Court seeking $1.8 billion in damages from the company's liquidators. He has been accused of being on a "politically motivated witch-hunt" and this week moved legally to try to block PPB's merger with accounting giant PwC.
Palmer believes he can regain control of the refinery, which could benefit from an increase in nickel prices, and then take advantage of what is lying next to the refinery. Palmer insists the country's largest, richest and most accessible cobalt deposit is sitting in the tailings ponds, which is extremely valuable given the demand for cobalt for batteries used in electric vehicles and mobile phones.
Clive Palmer and wife Anna on the hustings during the Queensland election campaign. Michelle Smith
"Its worth $6 billion and it could cost $2.5 billion to extract it. Well, I could sell it for $2 billion to give the guy who buys it a little [profit] on top."
Despite their potential, the tailings ponds have been a controversial issue. The Queensland government last year issued environmental protection orders against companies linked to the refinery, including one alleging a dam had contaminated water.
Palmer has also been charged by the Australian Securities and Investments Commission over the management of his Palmer Coolum Resort on the Sunshine Coast, and his attempted takeover of time-share villas in 2012. The charges relate to an alleged breach of takeover law and carry a maximum penalty of two years' imprisonment and an $11,000 fine for Mr Palmer and fines of up to $55,000 for his company.
'I could sell that for, say, $1 billion'
Then there is the Galilee Basin asset, for which Palmer's Waratah Coal lodged documents seeking environmental approval in April. Palmer believes the Alpha North Coal Mine Project, a series of open-cut mines over 144,000 hectares, could produce more coal than Adani's controversial Carmichael mine.
"I could sell that for, say, $1 billion potentially. The Styx Basin project could be worth $400-500 million if I sold it, it's got less quality coking coal." The mine could produce 10 million tonnes of coal per year, while a decision on the Galilee Basin project will reportedly be made by Monday.
Until any of those projects are underway, most of Palmer's wealth revolves around Sino Iron.
Yet CITIC in April wrote down the value of the mine by about $1.2 billion and its executive chairman Chang Zhenming told investors Palmer's royalties are the major barrier to the project's profitability.
Palmer has no regrets. He has even launched a $1.81 billion indemnity action against CITIC, claiming delays to the royalty payments led to the closure of his Queensland Nickel refinery.
"I could sell that for, say $1 billion potentially. Glenn Hunt
"What you have to remember is I'm one of the only people who has taken on the Chinese government [CITIC is listed in Hong Kong] and won. What they did to me was a challenge to Australia. We had to stop that and fortunately I was the person who was chosen to stop it.
"They spent a lot of money and ran a smear campaign against me. There was an anti-Clive Palmer factor sweeping Australia. But we ended up winning. We spent a lot of money on it, but it was worth it."
The 2018 Financial Review Rich List is published Friday, May 25 in The Financial Review Magazine and online at afr.com
Clive Palmer arrives at the Federal Court in Brisbane to face a hearing into the collapse of Queensland Nickel. Nine News