Palmer’s Mineralogy sees cash drain of $40 million
Mining magnate Clive Palmer’s Mineralogy budgeted to burn through more than $40 million in cash in the first half of last year, financial accounts seen by Fairfax Media show.
The internal management accounts show a significant part of the forecast cash drain was due to the repayment to Mr Palmer of a $20 million loan.
They also show that in seven months Mineralogy, Mr Palmer’s flagship company, spent more than $1.9 million on aviation expenses – well in excess of the $1.1 million the company spent on drilling, exploration and mining. In the same period – July 2011 to January 2012 – it spent an additional $118,000 on what the accounts describe as media memberships, conferences and training.
Revelations about the state of Mr Palmer’s empire come as he tours the country unveiling candidates to run for his Palmer United Party at the September 14 federal election.
Mineralogy’s financial information for the 2012 financial year should have been publicly available seven months ago, but the accounts required to be filed with the Australian Securities and Investments Commission are overdue. But the management accounts show the group expected cash on hand to reduce from $55.3 million in January 2012 to $12.5 million at the end of the financial year in June.
The cash drain was to be funded in part by an increase in borrowings from another of Mr Palmer’s companies, Queensland Nickel.
There is no available financial information about Queensland Nickel, which was losing money before Mr Palmer bought it in 2009, but on Monday he angrily rejected media reports the company was in trouble.
The calculations also ‘‘exclude CFP [Mr Palmer] private cash’’, according to a note.
A spokesman for Mr Palmer said: ‘‘Mineralogy is a private company and has no borrowings other than from its shareholder. It has no outstanding creditors. In relation to filing its accounts, this seems to be an oversight from ASIC which Mineralogy will follow up.’’
Finance department commentary included in the accounts show the group was relying on receiving $39 million from the operators of the $7.8 billion Sino Iron project.
But Mineralogy was less confident of receiving money from its partner in the project, Chinese-owned CITIC Pacific, which is locked in a legal dispute with Mr Palmer over royalty payments.
‘‘Receivable from CITIC has not [been] factored into the cash flow projection as timing and amount is uncertain,’’ the report stated.
In NSW Supreme Court proceedings, Mr Palmer claims CITIC owes him up to $200 million in royalties from the Sino Iron project. CITIC claims it may not owe Mr Palmer anything.
The 59-year-old billionaire boasts he made his first fortune from real estate deals on the Gold Coast, a scenario which he says allowed him to briefly retire in his 30s.
He was a long-term National Party supporter and, later, a donor to Queensland’s Liberal National Party until a falling out with the party last year. He then launched the Palmer United Party, which has proceeded to attract a number of high-profile candidates, including former sports stars and John Bjelke-Petersen, son of the late controversial Queensland National Party premier Sir Joh.
Lately, Mr Palmer has been flying around the country in his personal jet, campaigning and revealing policies that include abolishing the carbon tax, scrapping fringe benefits tax to bring back the long lunch, and making it easier for asylum seekers to fly to Australia.
Last week in Melbourne, he unveiled 30 Victorian Palmer United Party candidates, and has boasted he would have candidates standing in 150 seats. He declined to answer when asked how much the campaign cost to mount.
Mr Palmer is standing in the LNP-held Queensland seat of Fairfax, with aims of being prime minister at the head of his party, and he recently boasted he is ‘‘incorruptible’’ because he is already so rich.