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Confusion over Queensland coal deal -

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Confusion over Queensland coal deal

Brigid Glanville reported this story on Wednesday, February 10, 2010 12:21:00

ELEANOR HALL: Businessman Clive Palmer is in damage control mode today over his claims about a $US
60 billion deal to sell coal to China. Earlier this week Mr Palmer was spruiking the deal as
Australia's biggest ever export contract. But today the Chinese firm that he's named is
contradicting him.

China Power International says the deal is merely a framework agreement, as Brigid Glanville
reports.

BRIGID GLANVILLE: It's not the first time Clive Palmer has been caught in a difficult situation.
Last year he had a very public spat with the Queensland Government accusing the Premier Anna Bligh
of defaming him.

Today he's been caught out with the Chinese. Mr Palmer said he had a $US 60 billion deal to sell
coal to China Power International. But today the Chinese firm says it's only a framework agreement.

Mining analyst Gavin Wendt from Mine Life says there are questions being raised about the timing of
the deal, as Mr Palmer is trying to float his company Resourcehouse.

GAVIN WENDT: Well it's curious. I mean, it's sort of been done in a very stage-managed way designed
to generate maximum publicity. I mean the fact that the announcement was made on the weekend,
reported in the Sunday papers to much fanfare, it obviously generated strong headlines. You know,
it wasn't the sort of conservative managed, measured approach that one would expect.

BRIGID GLANVILLE: Clive Palmer was trying to raise the money for his company Resourcehouse in Hong
Kong, the deal deemed to be too large for the Australian market.

Gavin Wendt says investors should be cautious.

GAVIN WENDT: Well particularly given there's a reasonable amount of market uncertainty at the
present time just generated by general market circumstances. I think investors are going to be
rightly cautious about looking at Clive Palmer's company.

I mean, you know, it may well just be a minor oversight on his part, but you know, when you're
talking about the scale of potential investment and the scale of the deal in this instance,
investors have every reason to question the manner in which I guess Clive Palmer conducted himself
and made the announcement.

BRIGID GLANVILLE: Clive Palmer has recently put his differences aside with the Queensland
Government. Premier Anna Bligh has publicly supported the deal which was reported would create tens
of thousands of jobs in Queensland.

Today the Premier says commercial interests may be involved in the confusion over the coal deal.
Anna Bligh says she's been advised the deal is legally binding.

ANNA BLIGH: The question of the contract price for that supply is something that would be
negotiated probably on a triennial basis throughout the 20 year life of the supply contract. I have
satisfied myself, to the extent that it's possible with a private company, that they have taken all
reasonable steps to ensure that they have a legally binding agreement. I think you'll find that
there are a whole roll of other commercial interests at play here.

BRIGID GLANVILLE: Clive Palmer's company Resourcehouse is insisting it has a deal with the Chinese.

Premier Anna Bligh again.

ANNA BLIGH: If you go back to Mr Palmer's press comments the other day, what he made clear was that
he had a contract to supply 30 million tonnes a year for a 20 year period. I've certainly seen the
documents that attest to that and the documents also spell out the need for the price of that
supply to be negotiated on a regular basis throughout the 20 years.

BRIGID GLANVILLE: Mike Berrell from Wade Matheson China has been consulting with the Chinese for
the past 15 years. He says the confusion may come down to cultural differences.

MIKE BERRELL: I think it's probably an issue of a misunderstanding between the two parties which is
not uncommon when you're negotiating in China. Chinese I think, from my point of view, generally
want to negotiate and reiterate the contract a number of times.

So I think probably something's been lost in the translation between what Mr Palmer thought he came
away with and what the Chinese group thought they'd conceded in the negotiations.

It's not unusual, from my point of view anyway, in my experience that these things happen because
of either the inexperience of the western negotiators that could have been simply something lost in
translation.

BRIGID GLANVILLE: The confusion over the deal should become clearer later today when Clive Palmer
fronts this media this afternoon.

ELEANOR HALL: Brigid Glanville reporting.