Documents obtained by 7.30 under Right to Information raise serious safety and maintenance concerns about Clive Palmer's Townsville nickel refinery, which he is promising to reopen.

Key points: Workplace Health and Safety Queensland found possible breaches of safety laws at Clive Palmer's nickel refinery, documents show

Workplace Health and Safety Queensland found possible breaches of safety laws at Clive Palmer's nickel refinery, documents show In one incident, an explosion occurred in a roaster while the refinery was being operated by an administrator

In one incident, an explosion occurred in a roaster while the refinery was being operated by an administrator Former workers say safety and maintenance concerns were increasing before the administrator took over

Amongst the revelations are findings by Workplace Health and Safety Queensland that possible breaches of safety laws occurred, but enforcement was not pursued.

One of the incidents was so serious it could have resulted in a fatality, a mining expert told 7.30.

It has led to former workers questioning whether the refinery can safely reopen, and one analyst predicting the cost to do so would be more than $100 million.

Production has been on hold for three years after the refinery racked up massive debts following a collapse in the nickel price, resulting in almost 800 people losing their jobs.

Ray Alexander worked at the refinery for 30 years. ( Supplied: Travis Mead )

In the first round of staff cuts in January 2016, 240 people lost their jobs and the refinery was taken over by administrator FTI Consulting.

Under the administrator, production continued.

Ray Alexander worked at the refinery for three decades and was still there during the administration period.

He said workers had to be pragmatic about safety after the mass layoffs.

"Mood-wise it was a bit like we just didn't know what was going on," he said.

"We'd have safety meetings and we'd just say, 'Don't be silly, don't do anything stupid'."

On February 16, 2016 a dangerous explosion occurred.

An inexperienced trainee was unsupervised while using an oil burner to start up a roaster that had been offline.

The lid of the roaster was blown off and left resting on the handrail. ( Supplied: Workplace Health and Safety Queensland )

Parts had been scavenged off the roaster and there was no evidence they had been replaced.

It sparked an explosion that was described by Workplace Health and Safety Queensland as a "higher consequence event".

No injuries occurred, but workers were nearby and equipment was damaged.

It blew open a safety door, spun a vent around 180 degrees and potentially caused cracking.

Mining safety expert Professor David Cliff, from the University of Queensland, believes the incident could have resulted in a workplace death.

"The lid off the top of the safety valve could have flown off and landed on somebody," he said.

"This vessel itself could have exploded, it could have failed catastrophically, emitting fumes and blast pressure for anyone who is close by, so there could have been a fatality easily."

'Maintenance issues kept piling up'

Former maintenance engineer Jason Townsend when he worked at the refinery. ( Supplied: Jason Townsend )

Fifteen days earlier there was another near miss in the roaster area, when 1,000 litres of heavy oil entered a hot, offline roaster, which had the potential to create an explosion.

It was reportedly caused by operator error, but Workplace Health and Safety Queensland found the incident was poorly investigated, failing to explore whether "competency, supervision, miscommunication, workload, fatigue or manning issues" were involved.

Professor Cliff told 7.30 these two incidents showed the refinery had become increasingly dangerous.

"These incidents are consistent with a behaviour caused by the reducing of staffing, the increased pressure on costs, the increased pressure on reduced maintenance," he said.

"Therefore you have to suggest these examples are potential for increased harm to the workforce."

Though the incidents occurred while the administrator was in charge, a scathing audit by Workplace Health and Safety Queensland found the previous operator, Queensland Nickel, was to blame.

"It appears that the decision to cull 237 QNI employees … may be the common root cause," the audit report said.

"The cut in worker numbers were approved and implemented by the officers of QNI at the time."

The 2016 audit also found no risk assessments or plans were put in place to manage the significant reduction of staff by Queensland Nickel, a potential breach of workplace health and safety laws.

It also said Queensland Nickel had halved spending on repairs and maintenance by $40 million a year compared to the previous owner, BHP.

Former maintenance engineer Jason Townsend told 7.30 he quit midway through 2014 because he was worried the refinery was becoming more dangerous.

"I'd frequently do site inspections of several areas of the plant, and the observation of a lot of corrosion leakages, and it was all quite commonplace for that to occur and it never sat right with me," Mr Townsend said.

"The list just kept getting bigger. That was my greatest concern. Maintenance issues kept piling up."

Report warned of cracked stack

A cracked stack at the Queensland Nickel refinery. ( Source: Major Hazard Facilities Audit report )

That was not all the safety regulator found.

In 2015 a graduate engineer employed by Queensland Nickel was asked to assess an area in dire need of repair known as the 320 Concrete Stack.

The engineering report warned the refinery's management there was significant cracking of the stack's shell, seepage of acidic material through the cracks, and that it was at risk of total collapse with a remaining lifespan of four years.

Former worker Mr Alexander said the poor state of the concrete stack was well known and workers were told to stay away, but he was not told how serious the situation was.

"There was an exclusion zone around it. Mainly they were worried about bricks falling," he said.

"There should have been something done, but I wasn't aware of that [while working there]."

Instead of acting on that urgent warning, Workplace Health and Safety Queensland found the response by Queensland Nickel was "grossly inadequate" and potentially a breach of two workplace safety laws.

Shoena Messner, director of Major Hazard Facilities at Workplace Health and Safety Queensland, said the engineering assessment rang alarm bells for her.

The notification came from the administrator, not Queensland Nickel, months after the warning had been received.

"What we did when we discovered the 320 Stack and had a look at the assessment, we sought to see for ourselves whether or not it was still safe, or was safe enough to allow people to be in the vicinity, or in fact if there was a risk to the community in a cyclone event," Ms Messner said.

"The obligation we would normally have for an operator would be that they respond to that immediately by validating the engineer's concern, or refuting and working out how to fix it.

"We did not have any evidence to say that they [Queensland Nickel] did."

Workplace Health and Safety Queensland did not take legal action against Queensland Nickel for the alleged breaches.

Former worker Mr Townsend said that was disappointing.

"It seems like there was a lot of grace being given, and the plant has been in a state of poor maintenance for a very long time," he said.

"I do think more action should have been taken and I don't really understand why it wasn't."

Ms Messner defended the decision not to prosecute.

"From the evidence that I have, before we would go for any enforcement action, there has to be a hell of a lot more evidence than that," she said.

"It is not nearly as dire as was presented in … the initial report … subsequent inspections and evaluations say that the exterior of the stack is structurally sound.

"We were doing our very best to create an environment … where as much as possible, the workers and the community was safe."

'Hard to believe' mine will reopen

Mr Palmer remains the owner of the refinery through another company, Queensland Nickel Sales.

That company has also had problems with the safety regulator, with 22 improvement notices issued against it relating to concerns ranging from firefighting equipment not being tested to leaks of hazardous chemicals.

All 22 issues have now been addressed.

Resources analyst Carey Smith thinks it is unlikely the refinery will be reopened. ( ABC News: Erin Parke )

Resources analyst Carey Smith, from Alto Capital, said he was sceptical about Mr Palmer's public statements that he planned to reopen the refinery.

He said even if Mr Palmer only processed cobalt from the tailings dams, and not nickel, the economics still would not stack up.

"From a business point of view, I find it very hard to believe," Mr Smith said.

"What I reckon is the plant will stay on care and maintenance for the foreseeable future, because there is no reason financially or economically to commit the required funds."

Mr Smith has reviewed the documents obtained by 7.30 that reveal the maintenance issues and overall deterioration of the refinery, and said his assessment about the cost of reopening had skyrocketed.

"Parts of it are over 45 years of age. Large parts are getting concrete cancer, it's rusted," he said.

"I knew that maintenance had been lacking there but I didn't realise how much it had been lacking.

"My estimate has increased to $100 million-plus, just to the restart the project."

Mr Alexander said he hoped Mr Palmer did reopen the refinery, but wondered whether it was possible.

"He would have to spend a lot of money. It's been three years idle now. You turn something off for three years, go away and leave your car in the carport for three years and you come back, it's not going to go, is it?

"If he spends the money, Townsville would love it."

'Stack found to be in good condition'

Clive Palmer's nickel refinery in Townsville. ( AAP: Andrew Rankin )

Mr Palmer declined to be interviewed by 7.30.

But in a statement, Mr Palmer said administrator FTI Consulting was in charge of the facility in February 2016, when the roaster incidents took place, and the administrator had refused to continue to employ key personnel.

Mr Palmer did not address specific questions about the findings of the workplace audit and alleged breaches of the law by Queensland Nickel.

"Key management personnel that were responsible for the operation of the refinery were placed on leave by the administrator and refused access to the site," the statement said.

Mr Palmer's statement also did not address direct questions about whether Queensland Nickel failed to respond to the warning about the concrete stack.

Instead he said an expert assessment conducted three years later had a different finding.

"In relation to the concrete stack, an expert on chimney stacks carried out a further inspection and completed a report during 2018, which has been subsequently lodged with the regulators. The stack was found to be in good condition," he said.

FTI Consulting said it could not respond directly to Mr Palmer's claims due to ongoing legal proceedings.

In a statement, FTI Consulting said: "In recognising the significant level and extent of lapsed maintenance from prior to the administration, a WHS consultant was retained by the administrators on an ongoing basis from 15 February 2016 to work with the Maintenance, Health, Safety and Risk personnel of Queensland Nickel to prioritise, plan and put into action safety risk and maintenance matters."

FTI Consulting said no-one was injured in the roaster incidents, and it took immediate action once they occurred.

"Immediate structural assessments were made and damage assessed to be minor," the statement said.

"The administrators are not aware of any complaint, nor have they been notified of any alleged breach of the Workplace Health and Safety Regulations, in regards to either of these incidents."