- BRW Lists
Published 30 November 2011 13:27, Updated 07 December 2011 16:42
It’s just ticked past 6am on the first working day of the week. Three aspiring entrepreneurs are sitting alongside billionaire Clive Palmer on the white leather couches of one of his private jets and are about to find out how Australia’s fifth-richest person does business.
While last year’s winners spent a week touring sites in Queensland and NSW, with property developer Harry Triguboff this year’s winners winged their way across mine sites in four different states.
With a fortune of $5.05 billion, Palmer is Queensland’s flamboyant mining magnate, who has spent the past three decades conjuring up some of the most lucrative mining deals in Australian history.
Queenslander Nathan Hancey, 31, and Victorians Nathan Harding, 30 and Sarah Kidd, 25, have been selected from 400 applicants for BRW’sBond With A Billionaire competition.
Also on the jet is Palmer’s Bulgarian wife, Anna, a small entourage of Palmer’s assistants and closest business associates and a crew from ABC’s Australian Story, which has been filming Palmer over the past year.
The three BRW winners are hoping to discover how Palmer went from being a local real estate salesman to a globally recognised businessman who wines and dines Chinese tycoons and political leaders. They are also about to learn that a billionaire never rests.
On route from Brisbane airport to Palmer’s Sino Iron project in the Pilbara region of Western Australia, Palmer gives a hint of what’s to come. “They will get an insight into the pace we move at,” Palmer says, adding that it’s also the first time he’s allowing outsiders to get an inside look into the Sino Iron project, which is one of China’s largest investments in the Australian resources sector.
Before the journey begins, Harding says: “I want to learn everything I can about how he does deals.” Harding, who has a background in mergers and acquisitions with insurance broker OAMPS, now runs a franchise advertising business called Smart Saver that distributes newspaper ads to 80,000 homes across suburban Frankston.
Kidd, who leases shopping centres for Colonial First State Global Asset Management, says she hopes to get an insight into Palmer’s real estate background and is looking for tips on how she can make her first million.
Hancey, who runs Hancey’s Turf farm near the Stanley River in Woodford, Queensland, has Palmer on his list of heroes – the others include Alexander the Great and CNN founder Ted Turner. He hopes to learn more about the business tactics behind Palmer’s resource empire, Mineralogy.
The trio arrive on site just after 10am and spend the next few hours viewing the Pilbara site, first from air – in one of Palmer’s $6 million Agusta A119 helicopters – and then by land – Palmer takes the wheel of the four-wheel-drive, which proves to be a bumpier ride than usual.
He shows them some of the untapped sites he owns in the region that will form the next generation of projects. In 1985, Palmer bought the Pilbara tenements and held onto them. Five years ago he negotiated a deal with CITIC Pacific Mining, which now has the right to mine up to 6 billion tonnes of magnetite iron ore. Not only does Palmer get paid $200 million for every billion tonnes CITIC mines but he also gets another 10 per cent in royalties every three months (which can vary depending on iron ore prices) when the ore is shipped out of Australia.
As well as making hefty fortunes from mining, Palmer’s Mineralogy holds in more than an estimated 100 billion tonnes of coal in the Galilee Basin in Queensland, where he has a similar lucrative deal in place. Palmer also owns half the Papua New Guinea-focused oil and gas company Chinampa Exploration, which he hopes will be his next biggest money maker.
“One of the things that really amazes me about him is the scale of just how big everything he does is,” Hancey says. “And that he’s delving into new areas – gas and oil in Papua New Guinea – and that all those year ago he had the foresight to buy the [Pilbara] site. He put it on the books so when they got a deal some years later, he was ready to make it operational.”
Next stop is Melbourne, where we all check into the Hyatt in Melbourne at 1.30am the next day (Palmer always tries to stay at a Hyatt hotel no matter where he goes) and four hours later everyone is back on the road (somewhat delirious from the lack of sleep) to attend the King David School Business Breakfast.
Palmer delivers an animated speech to Jewish school children about how the Australian government should be treating refugees more humanely. He finishes off with some advice about how important it is to appreciate what you have – the nice weather, friends and family. He also pledges $10,000 for the school’s fund-raising efforts.
“I never realised his passion for refugees,” Kidd says. “That he would be advocating that we should process refugees onshore in Australia, that really surprised me in a positive way.”
At 9am everyone gets back on the jet to fly to Townsville and we watch Palmer address hundreds of Queensland Nickel (QN) workers at the Townsville-based Yabulu nickel refinery, before touring the site. Palmer took over the refinery from BHP two years ago, saving 1000 jobs – a point he makes repeatedly.
The refinery supplies about 10 per cent of the world’s nickel but since the price of nickel dropped a few years ago, workers have been fearful for their jobs.
Palmer assures them everything is fine - some are convinced but some aren’t). Then at a press conference with local media he launches into a personal attack on the Minister for Climate Change and Energy Efficiency, Greg Combet and the government’s mining tax, before attending a private meeting with QN executives.
Hancey is impressed by the speech to workers and accepts that Palmer’s not purely in business for financial gain.
“I think he’s got a big heart for Australia,” Hancey says. “He’s always talking about Australian jobs and Australian people.”
Our journey ends with a flight to the Sunshine Coast for a gala dinner to mark the start of the PGA golf tour the Palmer-owned Hyatt Coolum resort. Beer, wine and a seafood buffet are the perfect finish to the frantic pace of the past 48 hours.
The next morning the competition winners reflect on their experience. Highlights include the helicopter ride over Cape Preston, the bumpy four-wheel-drive journey around the Pilbara and the gala dinner with Greg Norman.
But what stands out most for all three is seeing the human side of Palmer. He has a unique ability to size people up in 30 seconds and make an instant connection. He also says what he thinks – whether it’s politically (and sometimes factually) correct is irrelevant.
Hancey focused most of the trip networking with the people who work closely with Palmer – former Gold Coast United soccer player, now one of his personal assistants, Steve Fitzsimmons, and his so-called bodyguard “Giggles” (Scott Higgins is an ex-goal keeper for the same club that Palmer owns). Whether these connections prove fruitful to Hancey remains to be seen but after two days with Palmer, he has the confidence to take a few more risks with his turf farm business and perhaps branch out into new areas. “It’s got me crystal ball gazing,” he says. “Where I can be in 10, 20, 30 years’ time. I want to start optimising some of the land that we have at the moment, perhaps look at more sustainable development or at putting wind farms in. I’d like to start planting the seeds now.”
Kidd, who spent most of the trip asking Palmer questions about his real estate ventures, has learnt that age is no barrier. Palmer started in real estate at 21 and was a millionaire before the age of 30. “I’ve wanted to start a group-buying site for high-density residential developments for some time now,” Kidd says. “Clive’s given me a few tips on how to do it. Firstly, to come up with a clear concept of how it will work, before I approach the developers. And secondly, to charge them only a 1 per cent fee initially, rather than 10 per cent, until the site’s properly established.”
Harding has spent the journey getting insights from Palmer’s business associate and life-long friend Geoff Smith. “The main thing I’ve taken away from Clive is how he keeps up momentum,” Harding says. “There’s never a moment where he stops thinking about the next business deal, or the next speech, or the next event.
“The other thing I learnt came from Geoff, who said: ‘Clive never sells anything to people; they buy from him’. He somehow sets the stage so that people want to do business with him, rather than having to do a big sell. I hope that’s a place I can get to.”