Australia sees $73 million cleanup bill for nickel plant near Barrier Reef

Image: A tourist stands on the beach as a large reef fish swims searching for food in the reef flats on Lady Elliot Island and 80 kilometers north-east from the town of Bundaberg in Queensland, Australia, June 9, 2015. REUTERS/David Gray


SYDNEY (Reuters) – Australia estimates it will cost A$93 million ($72.68 million) to begin the clean-up of environmental damage at the bankrupt Yabulu nickel refinery in the country’s northeast near the Great Barrier Reef, local media said on Wednesday.

The Australian Environment Department figure, which Australian Broadcasting Corp said it had obtained, represents the initial cost of dealing with millions of tonnes of toxic sludge in the tailings dam and ponds at the refinery and located in an area covering several hectares a few hundred metres from the Coral Sea and Great Barrier Reef.

The administrators of Queensland Nickel Pty Ltd, owned by Australian mining magnate Clive Palmer, who is a member of the Australian parliament, this month recommended liquidation of the company.

Administrators are seeking A$190 million from the operators of the refinery, a joint venture run by two Palmer-linked units, for employee payouts and for unsecured creditor claims.

A decision whether to proceed with liquidation will be voted on by creditors on April 22.

The plant was placed in voluntary administration, the initial stage of bankruptcy in Australia, in January after a collapse in nickel prices.

Palmer was not immediately available for comment.

Australian scientists said on Wednesday that just seven percent of the Great Barrier Reef remains untouched by mass bleaching that is likely to destroy half the coral.

Environmentalists blame the deterioration on industrial activity in the area.

Bleaching occurs when the water is too warm, forcing coral to expel living algae and causing it to calcify and turn white. Mildly bleached coral can recover if the temperature drops, otherwise it may die.

($1 = 1.2796 Australian dollars)

(Reporting by James Regan, editing by David Evans)

Copyright 2015 Thomson Reuters. Click for Restrictions.

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