nickel ore in a ferronickel smelter
A worker displays nickel ore in a ferronickel smelter owned by state miner Aneka Tambang Tbk at Pomala district in Indonesia's southeast Sulawesi province March 30, 2011. The country accounts for roughly 7 percent of the world's total nickel mine output , according to Reuters data. Reuters/Yusuf Ahmad

Philippe Germain, president of New Caledonia, warned Clive Palmer of violence and unrest within the french territory if Palmer's nickel refinery in Townsville shut down.

Palmer's Nickel smelter was denied of $35 million loan by the Queensland government.

"Despite unencumbered assets of nearly $2 billion, it [Queensland Nickel] was denied a $35 million overdraft by the four major Australian banks. I have been informed Queensland Nickel was told that in the current investment environment they would not lend to a resources company," Palmer said.

Treasurer Curtis Pitt said "an alarming precedent" would set in if the private company would bail out.

Approximately 800 workers could lose their jobs and closing down the smelter could cause regional implications since nickel mining is one of the top two industries in the French territory.

New Caledonia's president has warned Palmer against closing his establishment.

“I am advised by Mr Palmer ... they expressed their concern as to whether QN [Queensland Nickel] would continue to buy ore and that the failure of QN to be in a position to do so would result in political unrest, violence and even closure of mines in New Caledonia, as QN has been the sole purchaser of laterite nickel ore for the last 20 years,” QN’s director Clive Mensink was quoted by the Australian as saying.

One of Palmer's biggest customers are New Caledonia's mines.

Rolling protests have rocked New Caledonia it blocked its nickel exports to China to address declining nickel exports to Australia.

Palmer's struggling nickel refinery appears to have been one of his significant revenue-producing businesses for a number of years. This could make or break his financial status.

Palmer believed his being a member of the parliament has put him in a precarious position with his critics. "It is evident that I am being personally attacked because I am a politician," he was quoted by the Sydney Morning Herald as saying last week.

He refused to engage with potential buyers of his Queensland resort to save his struggling nickel refinery.

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