Aussie court stops Palmer's firm attempt to axe Citic Pacific mining rights
The Western Australian Supreme Court has moved to prevent Clive Palmer's mining company from stripping its Chinese business partner, Citic Pacific (HKG:0267), from its mining rights for the Sino iron ore project.
Mineralogy served Citic a termination notice in early September, which gave the firm 21 days until the firm was supposed to no longer be able to mine iron ore at the massive iron ore project in the Pilbara.
Palmer’s firm has said the move was the result of governance and market disclosure concerns, as Citic allegedly failed to address matters raised in a default notice dating back to July 2012.
"This is a $10 billion project involving many hundreds of millions of dollars, they've failed to pay their royalties to us and they've shipped over $200 million worth of product to China and not paid for it," Palmer told ABC Radio's The World Today program.
The mining tycoon turned politician added that 30 or 40 meetings with Citic and mediation undertaken with the assistance of former Federal Court judge Raymond Finkelstein failed to resolve the issues, and prompted the termination notice.
Today’s interim injunction preventing Mineralogy from acting on such notice was welcome by Citic.
"This ensures that operations at Sino Iron can continue without interruption. Sino Iron has been exporting quality iron ore concentrate," the company said in a statement.
The Chinese government-owned firm added that this is not the first time Mineralogy has been ordered by a judge not to rely on several default and termination notices over the past few years.
The over $8bn Sino Iron project began production later than planned after a dramatic cost blowout.