Clive Palmer Mining Worth 2012, Clive Palmer denies plans for real life jurassic park, Clive Palmer buys T-Rex, Clive Palmer building titanic ii---So how much is a modern mining magnate worth? Well it depends on what they really own. Consider Clive Palmer. After an early career in real estate development on Queensland’s Gold Coast, Palmer, who has today expressed political ambitions, used much of his wealth as seed money to spread his tentacles into the rapidly expanding coal and iron ore mining sectors.
His timing was impeccable. Thermal coal prices spiked to unprecedented levels allowing miners to experience profit margins beyond their wildest expectations.
Instead of earning margins of $2 to $10 a tonne as they had for decades, coal miners were earning margins of $50 to $100 a tonne which in turn increased asset values to levels rivalling well-established and brand name top 50 firms.
Similar ballooning values were observed in the iron ore sector. But Palmer was not the only investor to benefit from this escalation in asset values. Almost all firms and other visionary (or lucky) entrepreneurs who held valuable tenements – which included Aston Resources, New Hope Coal, Hancock Coal and Linc Energy – realised huge capital gains from the sale of their mining rights. These incredible gains were derived from the right to explore and mine certain tenements, rather than as a result of any tangible mining activity. Palmer carries the moniker in the media of mining magnate but strictly speaking, to earn this title one should really be involved in some form of mineral extraction. Palmer owns no mines.
His only producing asset is Queensland Nickel, a nickel and cobalt refinery near Townsville that he picked up for a song from BHP Billiton in 2009. BHP Billiton were happy to see the back of this asset after inheriting it from the Billiton merger, only to discover that production costs were twice initial estimates. Nickel prices have since improved and this is now a profitable asset – but only just.
His other assets may one day become producing mines but there are significant challenges to convert an empty paddock into an operating mine. So the term mining magnate may be a little stretched.
The same goes for Nathan Tinkler. Palmer’s own privately-held firm Mineralogy is the umbrella corporate entity through which all of his main interests are held. The company has secured access to several billion tonnes of iron ore reserves in the Pilbara Ranges as well as several billion tonnes of thermal coal in several tenements in Queensland.
The cost viability of extracting these ores however is questionable. Palmer’s flagship coal venture at Alpha North and Alpha West in the Galilee Basin comprise his great white hope of reaching true billionaire status.
Unfortunately, these tenements are 500km from the coast and the quality of the resource is such that it will only suit Chinese and Indian buyers, who are not very reliable importers of thermal coal.
Around $6 to $8 billion will be needed to build a rail line and a deep water port, not to mention the mine itself, plus the costs and legal hurdles associated with regulatory approvals, environmental studies and land use compensation.
Read more: http://www.businessspectator.com.au/bs.nsf/Article/clive-palmer-coal-mining-hew-hope-aston-mineralogy-pd20120430-TU6JU?OpenDocument
