Aussie mining tycoon Palmer promises ‘truth’ on massive job cuts at his nickel refinery

Aussie mining tycoon Palmer promises ‘truth’ on massive job cuts at his nickel refineryAustralian mining tycoon turned politician Clive Palmer has promised a mass mail-out to “tell the truth” about what happened with his Queensland Nickel, from where he let go 237 refinery workers last week and then placed the company into voluntary administration on Monday.

The outspoken federal MP has said that plummeting nickel prices and the Queensland Government’s refusal to guarantee a A$35 million loan were to blame for his decision, ABC News reported.

According to Palmer he has chosen to remain silence ever since because the issue "is not a political one”, but he promised to open up after a creditors meeting next week in Townsville, where the company is based.

“At that time I will personally write to each household in the Townsville community telling them the truth of the matter,” he said in a statement quoted by SkyNews.

He also took aim at other politicians and some media outlets, which he said had used Queensland Nickel’s woes as a political weapon.

According to Financial Review, the Queensland government will again be asked to consider providing a loan guarantee to keep Palmer's Townsville nickel refinery open with no buyers for the embattled Queensland Nickel coming forward.

A new capital injection from Palmer is another possibility, according to the report, but it is considered highly unlikely as he could have sold other assets to help his struggling company last year.

Tough environment

At the current price of just US$3.86 a pound, 70% of Australia's nickel producers are making a loss, which is likely to trigger more job cuts and mine closures across the nation.

But Australia is not the only market where nickel companies are agonizing. As prices for the metal used in stainless steel plumb their lowest level since 2003, others have also started to hurt.

Another major player, Brazilian miner Votorantim Metals, announced this week it planned to suspend two nickel operations in the country, marking the first announcement of a sizeable shutdown in the west.