A meeting between creditors and administrators of Queensland Nickel has revealed safety issues which could threaten the potential re-opening of the beleaguered refinery business, according to a Fairfax report.
Minutes from a meeting between creditors and FTI Consulting – the administrator appointed by Queensland Nickel last month – were cited by the AFR to include reference to a large backlog of environmental and occupational health and safety issues which would need to be acted on, should the company be kept afloat.
The revelation comes a week after creditors were told anyone attempting to bail out the struggling business would have to absorb cash losses until at least 2017.
A Monday report in the AFR details a number of safety issues which were reportedly presented to creditors.
One major problem, according to the report, relates to the stability of a tailings dam at the Yabulu refinery, near Townsville, which independent consultants have reportedly estimated would cost over $10 million to fix.
“The administrators are currently looking at the options available,” the meeting minutes are quoted as saying.
“However, they acknowledged that any strategy would be expensive.”
Without a fix, closure of the refinery would be a real option, according to the report, which quotes the minutes: “If the administrators deem the site unsafe for work, the refinery will be closed down.”
A pile-up of safety issues would only add to the struggle faced by the refinery, which went into voluntary administration on January 18, days after sacking more than 230 workers, as a result of a slump in global nickel prices.
Creditors heard last week that the refinery produces nickel for roughly US$4.40 a pound, while the market price for nickel is currently below US$4 a pound. According to Fairfax, the refinery business is losing around $50 million per annum in the current market.