CITIC blocks efforts by Clive Palmer to terminate iron ore rights
CITIC Pacific has successfully obtained an injunction from the Supreme Court of Western Australia against Clive Palmer and his efforts to terminate the China-backed miner's rights to iron ore in the Pilbara.
Fairfax reports that CITIC filed a statement with the Hong Kong Stock Exchange today announcing that the injunction against Palmer flagship Mineralogy would be effective until the court issues a ruling with respect to a royalty dispute between the two parties.
Disagreement has recently broken out between flamboyant Australian mining magnate Clive Palmer and his Chinese business partners over royalty payments derived from the Sino Ore project in Western Australia's mineral-rich Pilbara.
CITIC has paid over USD$400 million to Palmer, the owner of the underlying Sino Iron tenements, for the right to mine two billion tonnes of ore, yet Palmer is also demanding additional royalty payments worth as much as USD$500 million in relation to extraction and production.
Palmer believes the royalties are owed to him as part of a "standard right-to-mine agreement" under which a royalty is paid when the ore is "taken", which in Palmer's view means when the ore departs from Australian shores for overseas processing facilities.
The mining magnate is believed to be claiming royalties on around seven to 10mt of iron ore already shifted by CITIC, stating that although the money involved is not large he would like to set a precedent because "it's a 30-year project and you don't want to constantly have disagreements."
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