Some light has been thrown on the viability of Clive Palmer’s Queensland Nickel (QN) operation.
FTI Consulting was appointed as voluntary administrators on Monday to manage the company’s operations.
Mr Palmer had constantly quoted that the site was worth billions, Empower Economics principal economist David Lynch said.
“That is correct for replacement value,” Mr Lynch said.
“But the residual value is worth only as much as someone would pay for it, which is likely nothing but scrap value against a significant liability in regards to (environmental) remediation.”
The Maritime Union of Australia (MUA), which has members on site, said workers had not been paid their entitlements including superannuation since November.
The flow-on effects of QN’s financial woes could reach as many as 10,000 in Townsville including business and workers’ creditors, according to MUA state secretary Bob Carnegie, who has called for a debt moratorium on mortgages and personal loans for sacked workers .
No one was spared, considering a top-shelf company like Aurizon was owed more than $27 million by QN, Mr Carnegie said.
QN’s long-term debt obligations added tens of millions to that amount.
The Sydney Morning Herald reported in 2005 that the then BHP Billiton-owned QNI had entered into a contract with the Queensland Government-owned energy trader Enertrade to supply coal seam gas.
At the time Enertrade refused to state specifics on the 15-year deal but the $300 million price tag was stated to be made up of a combination of the gas, transport, processing and work time.
The gas deal is “take or pay”, meaning the company has to meet its obligations over the period to 2022 regardless of whether or not the gas is used.
It is a common arrangement also entered into by many coal mines. In that case it is to guarantee access to rail and port handling facilities.
The gas is transported by Enertrade’s North Queensland Gas Pipeline from the Moranbah Gas Project to the Yabulu nickel and cobalt refinery about 40km north of Townsville.
The report at the time said the deal meant supply of 70-50 petajoules (PJ) of gas to QNI over the period of the agreement, which would lead to the refinery more than doubling its production.
Queensland Premier Annastacia Palaszczuk said she had ordered her ministers to fast-track public works projects across the state following the major job losses at the refinery.
Ms Palaszczuk said administrators would conduct an independent assessment of Queensland Nickel’s finances.