Dispute over Australia iron ore heats up
Aussie mining tycoon turned politician Clive Palmer has fuelled tensions with China after issuing fresh harsh comments against state-owned conglomerate CITIC Pacific, which began operations at its $8bn Sino Iron venture in WA late last year.
Palmer, whose privately owned firm Mineralogy is in the middle of a long-running royalties dispute with CITIC, told The Australian he would not stand by and watch local interests be "raped and disrespected by foreign-owned companies," without even offering them fair compensation.
His declarations come on the heels of a court win for Mineralogy, which ruled Palmer’s firm was the legal operator of Cape Preston port, a key part of the Sino project, Bloomberg reports.
It is still unclear the potential implications of the legal decision for the already over-budget project, which loaded its first ship last December, four years behind schedule.
All CITIC Pacific President Zhang Jijing had to say about this issue was that companies should choose their counterparties “very carefully.”
Sino Iron aims to become the world’s largest magnetite mine, turning low-grade ore in Australia’s Pilbara region into 24m tonnes of concentrate annually. In addition to the mine, the project comprises a desalination plant, the concentrator and the now lost Cape Preston port.
The project long-term goal is to break the dominance of the three largest iron ore miners, BHP Billiton (ASX:BHP), Rio Tinto (LON:RIO) and Vale (NYSE:VALE), from whom China imports. However, it has faced endless challenges, becoming a cautionary tale of the difficulties Chinese enterprises face as they seek to expand abroad. And the trio continues to be the main suppliers of high-quality ore to China steel industry, which imports close to 60% of its iron ore needs.
Image courtesy of Big Lift Shipping