The precise amount of Clive Palmer’s wealth has been the subject of intense speculation. The sources of his fortune have been topical since his election to Federal Parliament as member for the Queensland seat of Fairfax.
Mr Palmer recognised this on November 13, when he called a press conference to say he would abstain from voting on the carbon and mining tax repeal bills.
“I don’t think I need to abstain, however I don’t want to have a perception of anybody that I am acting in the wrong way,” he said.
All MPs are required to report to parliament on their financial interests within 28 days of being sworn in. Mr Palmer will reach that deadline next month.
Mr Palmer has been listed as a billionaire in the annual rich lists published by business magazine BRW ($2.2 billion in 2013) and The Courier-Mail newspaper ($1.98 billion in 2013). His business activities mostly involve the exploration and refinery of iron ore, coal, nickel and cobalt. He has recently diversified into tourism and ship building
Clive Palmer is constantly referred to as a billionaire in the media, but the man himself has been vague on the details of his wealth.Based on publicly available information, as at June 30, 2012, Mr Palmer’s wealth is $1.13 billion.
Mr Palmer has so far declined to confirm the extent of his wealth.
“Well, I don’t say I’m a billionaire. I’ve never said that. I’ve never said I’ve got any money. That’s what you say, that’s what The Courier-Mail says. That’s what, ah, Business Review Weekly says,” he said on ABC’s Australian Story on September 30.
“Who knows? I’ve never said I am a billionaire. It’s just that Rupert Murdoch keeps putting me on the rich list in Queensland every year,” he told ABC Lateline on October 9.
Earlier this year however he gave the Australian public a snippet of the size of his wealth during a 60 Minutes interview: “I don’t think you can rely on Forbes. I think a bit more than that [$750 million], certainly a lot more, you can multiply it a bit.”
Australian Greens Senator for Western Australia Scott Ludlam spoke about Mr Palmer’s use of his wealth during the election campaign.
“What we had in the mix, apart from this bizarre array of minor splinter parties, is a coal billionaire trying to buy seats in Parliament and just splashing millions of dollars around, running what looked to me like quite an effective populist anti-politics sort of campaign,” he said on ABC Lateline of October 2.
So, is Clive Palmer a billionaire? And if so, what are the business dealings that give rise to his financial empire?
Making the rich lists
Mr Palmer made his debut as a billionaire in the BRW Rich 200 list in 2007, when he was listed as having $1 billion. In 2008, The Courier-Mail, published by News Corp which Mr Murdoch chairs, also listed him as a billionaire for the first time, ranking him number one on Queensland’s richest 100 list with $6.5 billion in wealth.
Both lists report his wealth as between $1.98 billion $2.2 billion in 2013.
Business magazine Forbes is more conservative. The wealthiest he has ever been on its Australia’s 50 Richest list is $895 million this year.
Forbes measures an individual’s wealth by compiling his or her stake in public and private companies, real estate, yachts, art and cash less any debt, which essentially leaves his or her net assets.
ABC Fact Check has adopted a similar approach in determining Mr Palmer’s wealth.
Mr Palmer owns shares in 27 Australian private companies. In some of them he is the sole shareholder.
Unlike public companies, which are required to disclose their business affairs in detail and whose share value is recorded on the stock exchange, the real value of many private companies is not known because they are not required to file detailed accounts to the corporate regulator, the Australian Securities & Investments Commission.
The commission, however, requires large private companies to lodge accounts containing some financial information yearly. A large private company has at least 50 employees, revenue of at least $25 million, or assets of at least $12.5 million.
According to the corporate register maintained by the commission, some of the companies controlled by Mr Palmer in turn control other smaller private companies. Together, they stack up in a complex structure with Mr Palmer having the ultimate control.
Three large private companies controlled by Mr Palmer have filed accounts with the commission: Mineralogy, QNI Resources and QNI Metals.
Mineralogy is Mr Palmer’s flagship company. Its value stems from its 1986 acquisition of magnetite iron ore tenements at Cape Preston in the Pilbara. Magnetite is a low-grade form of ore whose iron is harder to extract than haematite ore mined by companies such as BHP Billiton and Rio Tinto in the Pilbara.
In 2006 Mineralogy struck a deal over the rights to mine some of the tenements with a Chinese company Citic Pacific Mining. Citic’s subsidiary, Sino Iron Holdings paid Mineralogy $US217 million at the time, and a further $US55 million in 2008. It also signed an agreement to pay royalties after it had developed an iron ore project.
Mineralogy is the parent company for many of Mr Palmer’s resources businesses such as the China First coal project in Central Queensland’s Galilee Basin, other nearby coal exploration projects run by Waratah Coal and oil exploration licences in the Gulf of Papua.
It is also the parent company for Blue Star Line, which is building the “Titanic II”, a replica of the original ill-fated passenger ship, and owns horses worth $682,764.
Mr Palmer owns over 99 per cent of Mineralogy, and the most recent corporate filings show the remainder held by his late aunt Jean Mensink and his late wife Susan Palmer.
According to financial accounts for the year to June 2012 lodged with the commission, the company’s assets were $342 million and its liabilities were $196 million, giving net assets of $146 million.
The liabilities include loans from Mr Palmer and related parties of $88 million. There is a note to the accounts that Mr Palmer has agreed not to ask for these loans to be repaid.
On this assumption, Mineralogy had a net asset value of $234 million as at June 2012.
Most of the assets are royalties expected to be received from Citic, valued at $193 million in Mineralogy’s books.
Mineralogy took court action against Citic, alleging it defaulted on one of its royalty payments earlier this year. On October 14, the Supreme Court in Western Australia ruled against Mineralogy.
Citic’s accounts for the year to December 2012 say it owes Mineralogy $US153 million in royalties.
The market value of a company is often analysed on the basis of its ability to generate future profits. Fact Check has not projected a market valuation of the company but notes Mineralogy made a profit of $63 million in 2011-2012. A large portion of this was due to an $88 million increase in the value of its future royalty revenue.
In 2011, it made a loss of $8 million.
Mineralogy key points
Company worth in June 2012 – $234 million
Profit for the year to June 2012 – $63 million
QNI Resources holds most of Mr Palmer’s leisure and nickel businesses. This includes his Palmer Coolum Resort, Coolum Country Club and Palmer Nickel and Cobalt Refinery in Townsville.
It also includes the dinosaur park which is located at Palmer Coolum Resort.
The 2012 accounts also show QNI Resources owns Asia Pacific Shipping Enterprises which is constructing four bulk carrier ships to carry coal, iron ore and other materials. The company is based in Singapore.
It also owns Palmer Aviation, although the financial details of this company are not available. Therefore Fact Check cannot determine the ownership or value of the aeroplane Mr Palmer uses and which carried the Palmer United Party logo during the election campaign. He has been photographed boarding a Bombardier BD-700-1A10 Global Express bizjet M-ATAR.
Mr Palmer owns 100 per cent of QNI Resources. Its accounts for the year to June 2012 show assets of $1.02 billion and liabilities of $359 million, leaving net assets of $662 million. Mr Palmer and related parties have lent the company $13 million. This makes the net value to Mr Palmer $675 million.
More than half of QNI Resources’ assets of $1.02 billion is the value of the refinery’s property, plant and equipment, which is not the result of new purchases over time but an upward revaluation of the original property purchased from BHP Billiton in 2009.
During a recent ABC 7.30 Report interview, presenter Leigh Sales asked Mr Palmer: “Is the nickel refinery that you own in North Queensland operating at a profit or loss?”
“Profit,” he said.
The company recorded a loss of $35 million in 2011-12, the most recent result available, mainly due to operating expenses exceeding sales of nickel and cobalt minerals.
QNI Resources key points
Company worth in June 2012 – $675 million
Loss for the year to June 2012 – $35 million
QNI Metals is Mr Palmer’s other main nickel and cobalt company. It co-owns the Townsville refinery with QNI Resources. Mr Palmer owns 100 per cent of QNI Metals.
Its June 2012 accounts show its assets of $268 million and liabilities of $78 million, leaving net assets of $190 million.
It made a loss of $7 million that year.
QNI Metals key points
Company worth in June 2012 – $190 million
Loss for the year to June 2012 – $7 million
Mr Palmer is a substantial shareholder of the public company Australasian Resources and owns 69.6 per cent of its shares based on September 2013 data. The stock market value of his shares is $20 million.
The company is developing an iron ore project in the Pilbara called Balmoral South in a 50-50 partnership with Mineralogy.
Australasian Resources also has interests in a nickel project in the Pilbara called Sherlock Bay and the Cat Camp nickel project in Kalgoorlie.
The chief executive officer of this company is the Western Australian Palmer United Party candidate Zhenya “Dio” Wang. In the 2013 financial year, Mr Wang earned a salary of over $200,000.
Mr Palmer also owns property and land in Queensland. Some of the houses he owns are in Fig Tree Pocket, Broadbeach Waters and Paradise Point.
Based on median figures for residential property in those areas, Mr Palmer’s houses are worth about $7 million. This figure does not include the value of all the land he owns.
Mr Palmer also owns several golf courses outright including the Robina Woods and Colonial golf courses on the Gold Coast. The value of these assets is unknown as the company which owns them, Palmer Leisure Australia, has not lodged any accounts.
Mr Palmer’s personal assets which are not held through company structures or in real estate are not on the public record. The sources of his loans to Mineralogy and QNI Resources are not known.
He is reported to own a large collection of over 150″ cars and also the Club Med resort in Bora Bora.
Based on publicly available information, as at June 30, 2012, Mr Palmer’s wealth is $1.13 billion although some of the companies he owns made losses that year.
Calculating Clive Palmer’s wealth
Mineralogy – $234 million
QNI Resources – $675 million
QNI Metals – $190 million
Australasian Resources shares – $20 million
Properties – $7 million
Total $1.13 billion