Clive Palmer is still our richest politician.
Photo: Rob Homer
Clive Palmer’s wealth is set to tumble by a cool $1 billion, just as his political influence and power peaks.
Palmer has made his fortune in resources and will retain his billionaire status, but his wealth, measured at $2.2 billion a year ago, will be considerably smaller when the BRW Rich 200 list is published on Friday.
Now describing himself as a full-time politician and a “retired businessman”, Palmer’s Palmer United Party is set to effectively hold the balance of power in the Senate come July 1, having formed a loose alliance with a number of independent senators.
The government needs six of the eight crossbenchers to repeal the carbon tax and is counting on David Leyonhjelm, Bob Day, the three PUP senators and Ricky Muir
However, Palmer’s wealth valuation could get a boost on Wednesday evening when he reveals his party’s voting intention regarding the repealing of the carbon tax, to be considered by the new Senate on July 7.
Yet the fortunes of several other miners will also be hit on this year’s Rich 200 list, including those with private companies such as QCoal managing director Chris Wallin.
Some of those with assets in listed companies have also been hit hard, such as Linc Energy chief executive Peter Bond and long-time prospector Mark Creasy, who has investments in dozens of small and medium miners.
Sino Iron troubles
The S&P/ASX Resources 200 index is down almost 2 per cent since January 1. Much of the drop in Palmer’s valuation is attributed to troubles that have struck Sino Iron, the Pilbara-based iron ore mine that forms the basis of his personal fortune, and falling coal prices.
The Sino Iron magnetite project has been hit with huge budget blowouts, significant delays and legal battles between Palmer and China’s international investment arm, Citic. Citic Pacific is building the $10 billion project in Western Australia and as well as making large financial losses has battled Palmer’s Mineralogy investment company over the terms of royalty payments and control over an export facility. The investment by Citic in Palmer’s project has been described as one of the worst mining investments in Australia in the past decade.
However, considerable royalties are meant to be paid to Palmer as a result of the deal he struck with Citic. Already, more than $600 million has been paid to the billionaire, including $200 million in April last year.
Falling prices have also hit the value of Palmer’s coal assets, which include a $6.4 billion future coal project in Queensland’s Galilee Basin. Palmer’s Waratah Coal was given approval last year to build a thermal coal project near Alpha in central west Queensland, as well as a rail line linking the project to a proposed port extension at Abbot Point. Palmer has golf course and tourism assets such as the Palmer Coolum Resort, which has attracted notoriety for a collection of replica dinosaurs.
As has often been the case, Palmer holds plenty of other assets that could one day reap big rewards. It is a strategy he has employed for decades, including the acquiring of mining assets in WA in the 1980s.
One is a gas deposit off Papua New Guinea, which Palmer said last August could be worth $35 billion. There has been no news on the project since.
He has also commissioned the construction of a replica of the ship, the Titanic, reputedly to be ready to sail in 2017.
The BRW Rich 200 is out on Friday, June 27, inside AFR Magazine, and online at BRW.com.au.