Palmer buys Townsville BHP refinery

BHP has sold its Yabulu nickel refinery in Townsville, in north Queensland, to mining magnate Clive Palmer.

The value of the sale is being kept confidential but BHP says it believes there is enough working capital for the refinery to continue as a going concern.

BHP says it would write down the value of Yabulu assets by about $630 million and write off a further $220 million in unrecoverable tax benefits.

The sale is expected to be finalised by the end of the month and appears to have secured more than 700 jobs at the plant.

Mr Palmer says for the first time the refinery will be wholly Australian owned.

Mr Palmer says it is a good strategic fit with his other nickel assets, despite the drop in the ore price.

He says the existing 940 staff will benefit and says there is a possibility of more jobs will be created and the plant expanded.

Mr Palmer has also thanked the Premier and the Queensland Government for allowing the transaction to proceed so quickly.

The Queensland Treasurer, Andrew Fraser, has welcomed mining magnate Mr Palmer's purchase

Mr Fraser has been embroiled in a defamation dispute with Mr Palmer, but has set that aside to applaud the news.

"He's now announced, and it's on the stock exchange, that he will be purchasing the Yabulu refinery," Mr Fraser said.

"That's fantastic news.

It would have been devastating to Townsville and the regional economy for the nearly 1,000 jobs on site to be lost up there.

"What this is about is a good result here that means that the refinery will continue and it means ultimately good news for Townsville," he said.

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Fri 3rd July 2009 - 10:48am