Singapore 08/03/2016 - The Yabulu nickel refinery in Australia owned by Queensland Nickel (QNI) has received a conditional offer of around A$23 million ($17 million) to support operations at the refinery, FTI Consulting said.
FTI, which was appointed voluntary administrator of Queensland Nickel in January, will no longer have operational management control of the refinery after it was replaced by Queensland Nickel Sales (QNS) as manager of operations at Yabulu, it added in a statement on Monday.
QNS is a subsidiary of two companies owned by mining magnate and politician Clive Palmer, who also owns QNI. Palmer's regaining of control of the company and securing of the funding may have saved the refinery from closure.
Prior to being replaced as manager, FTI had given "strong consideration to replacing the Yabulu refinery into care and maintenance due to ongoing trading losses being incurred and concerns over plant maintenance, safety and environmental issues", it said.
A suspension at the refinery that took effect early last week is still in place at the refinery, a FTI spokesman told FastMarkets.But how and when the refinery restarts is now up to the new managers, he said.
The plant was set to shut down for around 11 days due to a lack of nickel ore.
The latest funding was secured against assets outside of QNI, according to FTI. The Australian Financial Review reported that the funding was secured against Palmer's other assets - though he declined to say from whom - and had become available after nickel prices recovered.
While FTI will no longer have operational or management control of the Yabulu refinery, it will continue to evaluate proposals tendered for the potential future restructure or liquidation of the company. This will include the continuing investigation into the past management of the company and the underlying reasons for its insolvency, FTI said.
The Yabulu refinery is able to produce 30,000-35,000 tonnes per year of nickel.
The London Metal Exchange nickel price fell more than 40 percent between May last year and mid-February this year. But since mid-February it has recovered by more than 20 percent and was last at $9,140 per tonne on Tuesday, down $245 from Monday's close.
(Editing by Mark Shaw)