Mining magnate’s assets a minefield of possible conflicts
Sleepy Tweedale Street, in the middle-class suburb of Graceville in Brisbane’s west, hardly seems the type of place that would attract a billionaire investor.
But tucked in among the mix of 1940s unrenovated cottages and small-lot modern houses is a nondescript family home listed as belonging to one Clive Frederick Palmer, the brash, self-proclaimed billionaire mining magnate who has just been elected to the federal seat of Fairfax.
How the modest rental income from the property’s tenants feeds into the financial empire of the globe-trotting entrepreneur is something of a mystery, like many of the transactions that are being used to fund his ambitious business projects and political campaigns.
But now since he has been elected to federal Parliament some insight into these deals might be forthcoming.
Twenty-eight days after taking the oath of affirmation Palmer, as an MP, will have to lodge a highly detailed register of his personal and financial interests in order to avoid any conflicts of interests. Failure to do so could lead to being in contempt of Parliament.
Fairfax Media, using property and company records and court searches and Palmer’s statements, has produced a snapshot of how the Queenslander’s register of interests might appear.
And in its current state, the house of Palmer appears to pose a minefield of potential conflicts for the businessman whose empire’s tentacles stretch into fields as diverse as aviation, shipping, mining, metal refining, real estate, primary industries, tourism and hospitality and overseas investments in Tahiti, Papua New Guinea, parts of Asia and possibly Africa.
Says governance and ethics expert Professor Charles Sampford this week: ‘‘He [Palmer] would want to be very upfront and ensure that in negotiating various initiatives he shouldn’t seek to gain a benefit.’’
While it is hard to distil fact from fiction among the many claims Palmer has made about various projects, company searches show he is a director of 74 different private companies. Each of these will have to be declared and pose a possible conflict if the related industries are debated in the house.
Palmer himself has expressed an airy disregard for the number of companies he is a director of, saying when asked on 7.30: ‘‘I wouldn’t have a clue. I don’t think of companies by numbers, I think of them by what they’re doing and I focus on their business, so I could sit down and run through every company with you if you had the time, but I know you haven’t, but I don’t look at the overall number of companies.
‘‘That’s not important. What’s important is I discharge my duties as a director in accordance with the corporations law.’’
Asked about the number of properties he owned, he said: ‘‘About 15 or 20 or something like that.’’
Clues as to the operations of some of his companies can be found in their names – such as Zeppelin International, a company linked to Palmer’s interest in building airships, or Palmer Aviation, believed to relate to aircraft he uses during his business operations.
Another potential aviation link can be found in a lease that Thai Airways had listed in land title records as having with Palmer’s office building in Brisbane’s CBD.
One project Palmer has been spruiking is his plan to build a replica of the Titanic ocean liner in China. Searches confirm Palmer as a director of Blue Star Lines Pty Ltd.
An associated website called Blue Star outlines his plans to ‘‘recreate the famous ship in honour of the 100-year anniversary of the launch and untimely fate of the Titanic’’.
A number of his companies correspond to his tourism and hospitality interests, such as his ownership of the Palmer Coolum resort – a luxury accommodation venue on Queensland’s Sunshine Coast.
Overseas, Palmer’s tourism interests are harder to trace but he claimed last year that he had purchased the former Club Med at Bora Bora in Tahiti for $10 million.
Despite the glamour of his tourism destinations – somewhat marred for some Coolum residents by the presence of large dinosaur models appearing in the grounds since Palmer bought the resort – interests in mining and minerals form the vast bulk of Palmer’s wealth and create the biggest potential for conflicts of interest.
Through his vehicle Waratah Coal, Palmer has claimed mining rights over 105,000 hectares of the Galilee Basin in central Queensland near Alpha with plans to ship 1.4 million tonnes of thermal coal annually, the main asset used to justify Palmer’s claim to billionaire status.
The project was approved in August by the Queensland government, allowing construction of a coal mine linked to the Abbot Point coal terminal near Bowen by a new 453-kilometre heavy haul railway line.
Through his main operating company Mineralogy, Palmer also has claims over significant areas of iron ore resources in Western Australia in the Pilbara.
The iron ore is the subject of a stoush over royalties after Chinese-owned CITIC Pacific mining bought the rights to the Sino Iron project. CITIC Pacific and Mineralogy are currently locked in a legal battle over the royalties.
Mineralogy also has interests in offshore petroleum exploration licences – at the northern end of the Gulf of Papua west of the country’s capital Port Moresby.
In any case, Palmer’s mining interests give an appearance of rude good health. Mineralogy’s special financial report for 2012 declared a net profit of $63 million.
Earlier this year Palmer said Mineralogy had no borrowings other than from its single shareholder and no outstanding creditors.
Both iron ore and coal are the subject of the existing mining tax, presenting a rich avenue for potential conflicts of interest in Palmer United Party’s stance on the issue. Another area of potential for conflict of interest rests in the carbon tax. Palmer’s QNI Metals operates his Queensland Nickel refinery, which is based about 25 kilometres north-west of Townsville.
Previously it has been revealed that in 2010, the Palmer-directed company Queensland Nickel donated a whopping $500,000 to the Queensland Liberal National Party.
The company filed summons in the High Court to challenge the carbon price scheme in May last year. Palmer was hit with a $6.2 million carbon tax bill in July by the federal government’s Clean Energy Regulator for refusing to pay the carbon tax owed by the refinery.
Palmer has previously denied he would be using a seat in Federal Parliament to further the interests of the Waratah coal operation. In September, Palmer said he and his Palmer United Party would have no conflict of interest if he voted to abolish the carbon tax.
Mineralogy also owns grazing land at Moore about 120 kilometres north-west of Brisbane and at West Patrick Estate in the Brisbane Valley, where Palmer has his Cold Mountain harness racing stud. Earlier this year, the stud was reported to be leasing out some of its prize bloodstock and locals report a number of horses are still being kept on the property. Mineralogy’s latest financial report lists horses worth some $682,764 under the heading of non-current assets.
A different picture of Palmer’s interests can be seen in his property holdings. Searches using RP Data reveal the one-time Gold Coast real estate agent has a range of investments including agricultural land at the back of Queensland’s Sunshine Coast, a canal-front mansion on the Gold Coast, a small industrial shed in western Queensland and a river-front home in Brisbane’s upmarket suburb of Fig Tree Pocket.
Palmer has made little secret in the past about his residing on the Gold Coast where he owns a number of other properties.
Dotted among the million-dollar land deals are less lucrative investments that appear connected to his family. One holding is a small commercial property in Jandowae a tiny country town west of Brisbane – the $100,000 purchase price is listed as being a transfer from his sister, according to RP Data records.
In Brisbane’s outer southern suburbs, Palmer owns a small, brick, residential property he bought in 1990 for $120,000. Fairfax was told by occupants the property is being used by a family member.
Companies directed by Palmer also hold significant real estate interests. Mineralogy Pty Ltd, his flagship entity, owns the jewel in the crown of the property assets – his own office building at 380 Queen Street, in Brisbane’s CBD.
The building was bought for $19million – a purchase that Palmer at the time boasted was made with cash. Land titles do not list any mortgages on the property.
On Thursday Fairfax submitted the lists of interests for Palmer to check. A spokesman for Palmer said Palmer’s interests will have to be declared in accordance with the appropriate act at the appropriate time.
On the ABC’s 7.30 this week Palmer denied his party would have a conflict of interest in its actions because of his extensive interests.
‘‘As a member of Parliament, you don’t have a conflict of interest, only if you’re a minister,’’ he said.
‘‘That’s what the legal cases say. Members of Parliament are free to vote as they want on anything.’’
He added: ‘‘What really matters is our ideas. Governments may come and go, but ideas go on forever. That’s what it’s about: serving the community. Don’t worry about money. It doesn’t matter how much money you’ve got, it’s the content of your character that matters. You should know that.’’
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