Clive Palmer’s incredible year just keeps getting more and more incredible. Just months after apparently turning the course of the Queensland election, forming a breakaway soccer organisation and attempting to sue the Hyatt hotel chain, Clive has made headlines around the world by announcing a new hair-brained plan – to build a replica of the Titanic.
The announcement, which came on the same day Palmer floated the idea of running against Treasurer Wayne Swan, saw Palmer state that his new company, Blue Star Line, was working with the state-owned Chinese company CSC Jinling Shipyard to build a near replica of the ill-fated Titanic.
It was a classic Palmer announcement – high on looks, low on details. As usual, Palmer had an attractive looking logo, very professional signage and some big bold statements, such as a hint that the Chinese Navy could escort Titanic II on its maiden journey in 2016.
“It will be every bit as luxurious as the original Titanic but of course it will have state-of-the-art 21st century technology and the latest navigation and safety systems,” Palmer said.
But don’t rush to book your passage just yet. Palmer has a history of floating ideas and even business concepts that never quite see the light of day.
Let’s take a look at a few of the big ideas Clive Palmer have floated in recent years and rate their chances of coming to fruition.
The float of Palmer’s coal mining giant Resourcehouse had a few false starts before finally getting an official launch in early 2010, with plans to raise $3.6 billion to help build the China First mine in Queensland. The float helped BRW stick a valuation of $5 billion on Palmer, but in June the float was pulled. The China First project remains at least 12 months delayed and major miners are now scaling back their coal mining plans.
Will it happen?
The more delays and false starts, the more the question marks are raised. The amount of work Palmer needs to do to get this project anywhere near production is enormous, including building rail and port facilities – and the more China slows, the harder it will get. This project is the centrepiece of Palmer’s empire, so he will be determined to see it through. But when the mine will get into production is tough to predict.
After being unceremoniously dumped from the ranks of A-League soccer club owners by the Football Federation of Australia, Palmer retaliated by establishing his own peak body called Football Australia. While mutterings about forming a breakaway league appear to have all but disappeared, a public inquiry into the administration of the game is ongoing and a chief executive has been appointed.
Will it happen?
Presumably a report into the state of the game will be produced and conceivably Football Australia could, as it says on its website “act as a think tank and idea hub to improve the governance of the game in Australia”. But it’s hard to see the body making any real impact without government backing and funding. And surely Palmer’s love of football has its limits.
Apparently the second version of the Titanic will be largely the same as the original, except for below the water where new technology will be employed to ensure the new ship doesn’t suffer the same fate as the old one. A maiden voyage is slated from England to New York in 2016.
Will it happen?
Clive has only signed a memorandum of understanding at this stage and details (such as costs) remain unannounced. Don’t book your passage just yet – the Titanic might be hot property for a little while this year, but will that nostalgia last?
Palmer says he will target Wayne Swan’s seat of Lilley, although Opposition Leader Tony Abbott seems more than a little unsure if the entrepreneur would actually get pre-selection. But Palmer is talking much bigger than a Brisbane seat. “I see it very important that we get Australia back on track – it is deadly serious that we make this country what it could be. Wayne Swan has been very public in his criticism of people like myself, Gina Rinehart and Andrew Forrest and others – and I think it’s important if we live in a democratic society, if that’s what he really believes, it’s up to the people to decide.”
Will it happen?
It’s hard to see. Abbott would be nervous about having the loosest of loose cannons wandering around the party room and surely it would make it extremely difficult for Palmer to run his business interests if he was in parliament – just ask Therese Rein. Quite simply, why would Palmer want the pain?
Clive’s love of old-school transport doesn’t just extend to the ocean liner. In 2010 he also floated the idea of investing in air-ship technology, registering a company called Zeppelin International and musing to reporters about the fiery clash of iconic zeppelin The Hindenberg. Palmer later said that interest in the Zeppelin was low “but maybe in the future. We’ll see.”
Will it happen?
Forget about it.
In February, Palmer appeared on ABC Television’s Lateline in the wake of Gina Rinehart’s investment in Fairfax Media and floated the idea of grabbing a share for himself. “Fairfax looks very exciting,” he enthused. “You could have an east-west play with Fairfax. Gina should come from the west and buy 15 per cent and we could buy 30 per cent from the eastern side of Australia and really get the place humming again. That sounds very, very attractive. I’ll have to consider that overnight and see what my stockbroker tells me in morning and my financial advisers. We’ve certainly got the money and we’d certainly like to see media in Australia become much higher.” Obviously Clive’s broker killed this off, because it’s never been spoken off again.
Will it happen?
No way. Not when you get the sort of media play Palmer gets without owning anything.
Palmer’s big tourism assets are the Coolum resort on the Sunshine Coast (formerly run by the Hyatt chain until an ugly dust up that was settled after legal action) and Robina Woods on the Gold Coast. But this was supposed to be just the start of his investment in Queensland tourism. Back in August 2011, Palmer said he would invest ” a couple of billion dollars” in the Sunshine Coast region, with a plan due in May 2012.
Will it happen?
Palmer is clearly keen to make changes at Coolum, but an investment in the billions looks unlikely given the state of the tourism sector and his other commitments. Just getting a good return on his current assets would be a great effort right now.
Some would say these big ideas are examples of classic overreaching by a mining billionaire who does little in the way of mining. Others would say these are the musings of a rich man, who can afford to indulge a few whims.
How Palmer can afford the money – and the time – to have so many different things on his plate can be partly explained by a news story from a few weeks ago that got about 1000 times less coverage than either Clive’s Titanic or political announcement.
On April 20, it was announced that Chinese conglomerate Citic Pacific had paid Palmer’s company Mineralogy $US200 million for the rights to mine another billion tonnes of magnetite iron ore in Western Australia.
Citic, which is developing the Sino Iron project near Karratha, has now paid Palmer $US615 million to mine three billion tonnes of his iron ore. Even better for Palmer (according to a report in The Australian) is the fact that Citic will pay Palmer a royalty of about $180 million next year, even if the much-delayed and hugely over budget project doesn’t actually produce iron ore. If the project does get up and running, annual royalties could eventually top $400 million.
It’s this cash that is the real rock on which Palmer’s fortune is built and from which these big ideas – crazy and otherwise – are launched.
Best of all, it’s another company – Citic Pacific – doing the hard work, leaving Palmer with plenty of time to pursue Titanics. And Zeppelins. And Fairfax. And coal mining. And tourism. And…well, who knows what Clive will come up with next.
This article first appeared on Business Spectator.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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