Clive Palmer, the $1.5b bid and the mystery Swiss group with WA mining stakes

The obscure Swiss-based group Zero Carbon Investek that claims it can raise $1.5 billion to buy rich-lister Clive Palmer’s Queensland Nickel refinery, but so far hasn’t, is invested in another Swiss company that explores for minerals that could be processed at the refinery.

Zero Carbon Investek owns 14.98 per cent of Swiss-group SunMirror AG, which is exploring for lithium, gold, nickel and iron ore in Western Australia. Those exploration licences are held through its subsidiary SunMirror Luxembourg.

SunMirror AG has only issued bearer shares – a financial instrument used to mask share ownership. Bearer shares are banned in Australia, although bearer share warrants are still allowed.

The minerals that SunMirror is exploring for in Western Australia include those that could be processed at the Queensland Nickel refinery, if Zero Carbon Investek is successful in acquiring that business.

So far, Zero Carbon Investek has not provided updates on its capital raising. Its executives and advisers were supposed to hold a briefing at the end of January in Townsville with media to provide more details, according to Domenic Martino, a long-term adviser to Palmer, and an adviser to ZeroCarbon Investek. However, this didn’t happen.

Richard Petty, a former CPA president and director, who is based in Hong Kong, and is leading a syndicate to raise money for Zero Carbon Investek to buy the refinery, and invest a further $US800 million ($1.12 billion) in a renewable energy project to power the refinery, did not respond to calls and messages.

Petty is a director and consultant to a range of small companies, but says he has previously “advised on projects with an aggregate economic impact in the hundreds of billions of dollars”.

Palmer did not return calls, but his media adviser said: “Clive has a lot on the go,” adding they had no updates on the refinery sale.

Zero Carbon Investek has circulated a document to potential investors, as it aims to raise capital to invest in the refinery. In the document, Domenic Martino’s Indian Ocean Capital and Green Bond Corporation are cited as advisers on the project.

Green Bond Corporation, founded in 2021, which counts Australians among its executives, is a Luxembourg-based, advisory group that says it “advises clients in the structuring and financing of large-scale, capital-intensive infrastructure projects”.

Zero Carbon Investek was also founded in 2021. In its fundraising document, it estimates that the value of the nickel, cobalt and iron in the refinery’s tailings dam could be retrieved and worth as much as $US9.4 billion ($13.6 billion).

This has left professional investors scratching their heads as to why Palmer, a confounding, clever and litigious businessman, whose fortune is worth close to $20 billion, would sell the refinery, if that value existed in the business? And why aren’t tier one-investors such as South Korea’s POSCO and Macquarie Asset Management not interested?

The Queensland government has granted approval for the refinery, which is located near Townsville, to begin importing and exporting nickel product again.

The refinery was placed into voluntary administration in 2016, laying off almost 800 workers. It then went into liquidation and a six-year legal battle ensued between Palmer’s companies and the liquidator, involving, by some estimates, almost 100 separate pieces of litigation. Creditors of the refinery have since been paid in full.

Zero Carbon Investek’s estimation of the value of the minerals in the tailings dam contradicts the liquidator’s report. The report raised concerns about the safety and environmental aspects of the tailings dam, and did not find any such value in the minerals that reside in it. But market conditions have improved substantially for the minerals since the report was written.

The demand for nickel and cobalt has grown in the past decade. Those minerals are important in the manufacturing of batteries needed for the booming electric vehicle industry and are considered critical for the high-tech and green energy transition, which is why they have nearly tripled in value in the past decade.

Zero Carbon Investek has two directors: David Rigoll, an Australian who resides in Switzerland and who has been involved with small to medium mining deals for the past four decades. Zero Carbon Investek’s other director is Swiss lawyer Hans Josef Frey.

Zero Carbon Investek has a substantial stake in SunMirror, which last year made a failed takeover attempt of Latitude Cobalt 66, an Australian explorer with cobalt exploration assets in Western Australia and Finland. SunMirror could not raise the capital required, nor did it get enough acceptances to execute the deal. In a filing at the end of the year, SunMirror revealed it had accumulated losses of 14.4 million Swiss Francs ($22.6 million).

Zero Carbon Investek’s bid to acquire the refinery from Palmer, remains subject to the approval of federal Treasurer Jim Chalmers, after due diligence is conducted by the Foreign Investment Review Board. The federal government now considers any investment in critical minerals, such as nickel and cobalt, as a national security sensitive sector.

Earlier this month, the federal government rejected Palmer’s plans to develop a central Queensland coal mine near Rockhampton, under the Environmental Protection and Biodiversity Conservation Act.

A Queensland government spokesman said the state’s Treasury department had done its due diligence on the potential acquirers of the Queensland nickel refinery.

Palmer, a covid vaccine opponent, has been busy hosting conferences this month, headlined by a US physician who has been heavily criticised for his controversial views on the coronavirus.

The Queensland-based billionaire also remains in a protracted battle with the Australian Securities & Investments Commission, where he is fighting charges of breaches of directors’ duties and fraud.

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