Administrators for Townsville’s embattled refinery business Queensland Nickel have reportedly asked the state government for an emergency $10m loan to avoid closure by the end of the week.
According to an AFR report, administrators FTI Consulting have said a $10m overdraft facility is needed to allow the Yabulu refinery to keep buying ore through March, after a delay in supply in February put a dent in the operation’s cash flow.
The refinery business, which is owned by mining magnate-turned politician Clive Palmer, has been up against it for several months, as the nickel market undergoes a prolonged price downturn.
According to multiple sources, Queensland treasurer Curtis Pitt this week appealed to the federal government for help finding a suitable buyer for the business.
“I would be keen to see a buyer,” Pitt reportedly told the Courier Mail, “someone to provide an equity injection into Queensland Nickel, and we would like to see, ultimately, the company continue to trade.”
FTI Consulting told the company’s creditors in February that anyone bailing out the business would likely have to sustain cash losses until at least 2017, as the nickel price remains well below the refinery’s production rate of about US$4.40 a pound.
Pitt continued: “I’ve written to my federal counterpart [Scott Morrison] to express our desire to work with them and ask they provide consideration to working with the state and administrators to find potential buyers.”