Taxpayers could end up footing the bill for environmental rehabilitation if the troubled business can’t be saved or sold

This article is more than 4 years old

This article is more than 4 years old

Cleaning up Clive Palmer’s nickel plant would cost Queensland taxpayers almost $100m – more than double what was previously thought – according to a new assessment by the state government.

Clive Palmer: cartoon villain or possible white knight for Queensland Nickel? Read more

Guardian Australia understands the price of rehabilitation for the Queensland Nickel site near Townsville, for which the state holds no bond, was revealed this week in an audit by the state’s Department of Environment and Heritage.

The prospect of taxpayers being lumbered with that cost has already prompted the government to quietly change environmental guidelines to allow the department to insist on bonds from companies running hazardous industrial sites.

However, the change will not apply to Queensland Nickel, whose workers were still in limbo on Saturday about whether Palmer, through a haphazard corporate manoeuvre to inject new money into the failing business, still had jobs for them.

The most expensive part of cleaning up the site was likely to be the waste ponds outside the processing plant, which are the subject of criminal charges brought by the department against Queensland Nickel.

The ponds overflowed during Cyclone Ita in 2014, allegedly leaking toxic waste into Great Barrier Reef waters.

Queensland Nickel, facing two charges of wilful contravention of its environmental authority, will soon have a date set for a trial in the Townsville district court after prosecutors filed an indictment on 22 Feburary.

It is also due to have three separate charges of non-wilful contravention of its permit over the same matters heard in the court on 1 June.

When the plant operator went into administration in January, the clean-up price for the site was roughly estimated by the environment department at about $40m, but no audit had been performed.

Under the previous environmental guidelines, only miners were required to give financial assurance for site rehabilitation as part of their environmental permits should their business go under, while industrial operators like Queensland Nickel were exempt.

The new guideline around financial assurance – which usually takes the form of a bank guarantee but does not place the government as a secured creditor in a company liquidation – was gazetted a fortnight ago.

The cost of rehabilitating the refinery site would apply should Palmer fail to save the business and no new owner for the site materialise.

Matters are complicated by the fact the site is owned by two Palmer companies but was operated by a subsidiary, Queensland Nickel Pty Ltd (QN), which went into administration in January with debts now alleged to be $428m.

QN’s Palmer-owned parent companies terminated its operating control on Monday, installing another Palmer-owned company Queensland Nickel Sales (QNS).

That left 550 workers employed by QN facing the axe on Friday in the absence of a contract offer promised on Monday by QNS.

Clive Mensink, Palmer’s nephew and a director of both QN and QNS, said the new company would write to staff to “ascertain their willingness to be employed in the refinery operation” only after it received its operating licences from the government.

“Until the government does provide these approvals we cannot satisfy the commercial parameters necessary to allow us to operate,’’ Mensink said in a statement.

“I would anticipate any offer of future employment would be on the same terms and conditions previously held.”

The Queensland environment minister, Steven Miles, criticised Palmer for installing the new operator without bothering to apply to transfer the environmental permit from QN, allowing it to legally run the plant.

Clive Palmer's nickel refinery cleanup looms as environmental test case Read more

But the government fast tracked QNS’s environmental authority on Friday.

However, it is understood that QNS, as of Friday afternoon, had still not supplied follow-up information requested by Workplace Health and Safety Queensland after a belated application for a major hazards licence.

A government source told Guardian Australia the licence could usually be approved within 24 hours.

FTI Consulting’s John Park, the administrator of QN, said in January that taxpayers were likely to foot the bill for any environmental clean up if the business could not be saved or a new owner found.

Labor leader Bill Shorten said he did not want to see the industrial facility looking “like a ghost town”.



“This is a major economic catastrophe for Townsville, if you take out 800 direct jobs and 1,600 indirect jobs you can imagine the impact on any regional community,” he said.



Shorten suggested the prime minister, Malcolm Turnbull, could step in and make sure the workers’ entitlements are paid, and then chase Palmer for reimbursement.

The federal MP for Herbert, Ewen Jones, said the refinery’s management should have planned for hard financial times because nickel was a “boom and bust” industry linked to steel.

“This has been borderline malfeasance by directors from the casual observer,” he told Macquarie Radio.

“This has been piss-poor management.”

Queensland treasurer Curtis Pitt said uncertainty for both the workforce and creditors needed to be addressed.

“I think that is the only fair thing, and I think right now that rests with Mr Palmer and what his next move is.”