PERTH (miningweekly.com) – Clive Palmer’s Queensland Nickel Sales on Monday appealed to the Queensland government to intervene to allow the Yabulu refinery to reopen.

The joint venture (JV) between QNI Resources and QNI Metals was appointed the manager of the Yabulu refinery on March 3, replacing embattled Queensland Nickel, which has been under administration since January.

Queensland Nickel Sales is aiming to have the refinery up and running by the end of July, but was currently not in a legal position to do so.

MD Clive Mensink explained on Monday that the JV partners and Queensland Nickel’s administrators had prepared a cash flow forecast that showed that when the finance facility obtained by the JV partners was combined with the ongoing business cash flow, the refinery would have positive cash flow well into the next financial year. 

At a meeting between the JV parties and the administrators early last week, the administrators agreed to commit to fund a number of ore shipments in order that the refinery could continue to operate, and subsequently several payments were made in subsequent days to secure ore for the refinery.

Mensink said that during the meeting it was also agreed that the Queensland Nickel administrators would transfer the JV property and relevant approvals to Queensland Nickel Sales.

“In the following days, Queensland Nickel Sales made relevant applications to the Queensland government to transfer the necessary approvals to operate the refinery once the administrators had terminated the workforce, which was scheduled by the administrators to occur on March 11,” Mensink said.

“As the approvals had been planned to be transferred, in essence, to the same refinery and port operations personnel, it was anticipated that these transfers would not take more than a few days to receive government approval.”

However, Mensink noted that in the days following the meeting with the Queensland Nickel administrators, the administrators subsequently decided to freeze the bank accounts of the business and not transfer cash balances to Queensland Nickel Sales.

“The administrators reversed their decision, and instead of continuing to receive ore for the business, sought to cancel orders and sell the ore to other parties,’’ he said.

“By March 11, the Queensland government had not transferred all approvals required. The administrators had not transferred the assets that were held in the name of Queensland Nickel to Queensland Nickel Sales.

“The administrators had not transferred the cash balance of approximately A$10-million to the account of Queensland Nickel Sales as it was required to do. Because of the cancellation of nickel ore orders by the administrators, there is no nickel ore projected to be delivered to the refinery.

“The result is that Queensland Nickel Sales is not in a legal position to operate the refinery or because of the above reasons, does not currently know when it will be in such a position.”

Mensink said that as a result, there was no smooth and clear transfer of the 550 staff from Queensland Nickel to Queensland Nickel Sales, as the refinery was already in shut-down mode.

Mensink had called on the state government to assist in ensuring that the relevant government approvals were obtained by Queensland Nickel Sales.

He further said that the situation involving the administrators of Queensland Nickel would have to be resolved, and that Queensland Nickel Sales’ financier had to be convinced that ‘attacks’ on the refinery management would not continue, and that the state government was, in fact, supportive of the refinery operations.

Furthermore, Queensland Nickel Sales would also require staff to return to the refinery, and was hoping to develop a training plan to allow staff to meet the relevant work, health and safety and environmental compliance requirements.

The Department of Environment and Heritage Protection at the end of last week approved the transfer of the existing environmental authority held by Queensland Nickel to Queensland Nickel Sales, with Environment Minister Steven Miles also issuing enforcement orders to Queensland Nickel Sales, demanding that the company ensure that the environment was protected.