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Titanic: Made in China

August 29, 2012

Australian tycoon turns to China for Titanic dream.

COOLUM, (Australia): Australian mining magnate Clive Palmer has a vision of the future and it’s made in China.

Palmer, a law school dropout, has based much of his fortune on selling minerals to China. Now backed by his faith in the fast-growing Asian economy, he wants a Chinese shipyard to build his dream project — a replica almost down to the tee of the Titanic.

A fleet of luxury Bentley cars shuttled journalists off his private jet last week to hear plans for the ship at his golf resort on a pristine stretch of Australian coastline.

Handing out reproductions of blue floral dinner plates lost with the Titanic 100 years ago, the wise-cracking, self-made billionaire sought to fuel interest in the project, which has been met with skepticism by some in the media.

Palmer dreams of cruising into New York Harbor on Titanic II flanked at the wheel by Hollywood stars, Chinese Communist Party leaders he has befriended, and descendants of the original passengers. A Chinese navy escort, as well as ones from the U.S. and British fleets, would be there too, he says.

“Why not build the Titanic?” questioned Palmer, who made his fortune in real estate and by selling mineral rights in Australia to Chinese investors. “I’m 58 and I’ve got the money and I don’t care what it costs.”

The original Titanic, the largest liner in the world when it was launched and dubbed “virtually unsinkable”, sank en route to New York after hitting an iceberg in April, 1912, killing 1,517 passengers and crew.

“I’m not saying he won’t do it, but all I’ve seen so far are the plates,” said James McCullough, a columnist for the Brisbane Courier Mail who has been following Palmer for years.

Palmer said his shipping company, Blue Star Line Pty Ltd, had reached a “memorandum of understanding” with Chinese shipbuilder SinoTrans to build Titanic II. The original ship was operated by the White Star Line.

The new ship will have the same dimension as the old version with 840 rooms and nine decks, he said. But would have extra safety features including modern life boats and better stability.

“If you book on third class you can share a bathroom, sit down at a long table for dinner every night, have some Irish stew and a jig in the night,” added Palmer.

Workers deserve a Mercedes

If all goes to plan, Titanic II is scheduled make its maiden voyage from Southampton, England, to Manhattan in four years, according to Palmer. “The big difference, is our ship won’t sink and will end up making money as a commercial enterprise.”

State-run SinoTrans is also building Palmer a half-dozen shipping freighters capable of navigating the Panama Canal in search of nickel ores to feed a refinery he runs in Australia.

Like his Titanic plans, skepticism dogged Palmer’s purchase of the loss-making QNI nickel refinery after the mining behemoth BHP Billiton said it could no longer make money.

The following Christmas, Palmer presented 55 of the refinery’s workers with a Mercedes Benz car and gave away 700 holidays to Fiji to celebrate a bumper year of profitability.

“Everyone who works hard deserves something nice,” he said.

Palmer made his first fortune in his mid-20s by selling Miami-style beach property in Australia’s Queensland state, which is roughly the size of Alaska but with 7,000 km of mostly tropical coastline.

Next, he galloped into natural resources just in time to catch Australia’s latest mining boom, fueled by China’s appetite for imported minerals to power its modern-day industrial revolution.

Several deals to sell iron ore and coal to Chinese state-owned enterprises propelled Palmer close to the top of a growing legion of super-rich Australian mining magnates.

Doubt him at your peril

“If you doubt what this man can do you do so at your own peril,” said Ian Ferguson, a 60-year-old property investor who gave Palmer his first job in 1976 and now runs the nickel refinery.

“I told Clive I had no experience running a refinery,” Ferguson added. “But he said ‘You’ve got good people and marketing skills, so get in there,’ and I did.”

Though happy to acknowledge his wealth, Palmer refuses to say just how rich he is and outside estimates vary widely.

“Let’s just say I’m not exactly calling up my bank needing a rise in my credit card limit,” he said.

Forbes puts his wealth at $795 million. BRW magazine, an Australian monthly, says he’s worth A$3.85 billion ($4 billion).

He has a passion for vintage cars owning more than 80 and recently dispatched buyers to snatch up even more at a European auction ahead of the opening of a planned museum.

To the horror of conservationists, he wants to turn untouched beachfront near his resort into a theme park with life-sized dinosaurs and high-rise accommodation. A jumbo jet would circle Australia daily picking up and dropping off guests.

As the mining boom unfolded, Palmer formed a firm called China First to sell millions of tons of coal a year to Chinese power stations – once he can work out how to cart the coal 500 km to his waiting freighters without drawing the wrath of environmentalists.

Never mind, too, the world now has a glut of coal that is forcing other Australian collieries to close: “It’s not about the price for coal. Our partners are about getting the coal because they need the heat,” said Palmer.

Cashing in on China

By imposing taxes on mining and vetoing foreign investors, often Chinese, Palmer is concerned Australia’s politicians underestimate the importance of forging bonds with an economy whose star is rising while the fortunes of traditional trading stalwarts in Europe and the United States fade.

But Palmer recently dropped plans to run for public office after being at loggerheads with leaders from both major Australian parties.

He has, among other things, engaged in a slanging match with Treasurer Wayne Swan and the country’s soccer administration, as well as publicly accusing Greenpeace of being funded by an arm of the U.S. Central Intelligence Agency. The environmental group called the allegation ludicrous.

The son of an Australian silent filmmaker and radio entrepreneur who took his family on a trip to China in 1962, Palmer likes to titillate audiences with stories of meeting the last emperor of China, Pu Yi, and says as a boy he bounced on the knee of Mao Zedong. His claims could not be independently verified.

He admires China for its social and economic headway and considers the Communist nation’s government “one of the most democratic institutions” at heart.

A quarter-century after acquiring rights to thousands of acres of abandoned mine exploration ground in the Australian outback for a song, Palmer is ready to cash in again thanks to the Chinese.

By November, Citi Pacific, one of China’s biggest steel companies, is due to start paying royalties that could top US$500 million a year.

“We have the natural resources here in Australia that China so desperately needs to fulfill its destiny,” he says.—Reuters


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