SYDNEY— Clive Palmer’s resources bets helped to underpin an empire that ranged from animated dinosaur parks to a political party that held the balance of power in Australia’s upper house.
Now, the entrepreneur’s wealth is being squeezed by the downturn in commodity prices.
On Monday, Mr. Palmer lost control of one of his biggest investments in the metals sector when insolvency specialists took charge of a refinery that processes nickel ore in Australia’s tropical Queensland state.
Queensland Nickel, which Mr. Palmer had bought years earlier from BHP Billiton Ltd., has been struggling to turn a profit due to plunging prices of the industrial metal and was recently refused a government bailout. Job cuts equivalent to a quarter of its workforce, made as recently as Friday, failed to keep the company afloat.
Global miners are scrambling to respond to one of the deepest downturns in commodity prices in a generation. BHP Billiton Ltd. announced its largest-ever write-down Friday, a roughly US$7.2 billion pretax charge against its U.S. onshore energy assets. Glencore PLC and Anglo American have also suspended dividend payouts and laid off thousands of workers to protect profits.
Nickel, used to make stainless steel and present in everything from saucepans to guitar strings, is one of the hardest-hit commodities. Prices have fallen to their lowest-level in more than a decade as investors fret over the health of China’s economy, amplified in recent months by Beijing’s muddled attempts to stabilize the yuan and its local share markets.
The value of nickel on the London Metal Exchange has slumped more than 40% since the start of last year, to roughly US$8,500 a metric ton.
For the rest of this article, click here: http://www.wsj.com/articles/clive-palmer-under-pressure-from-commodity-prices-1453094473