Clive Palmer slaps China’s CITIC with huge unpaid royalties bill in latest twist in legal battle

In the latest twist in a long-running legal battle, billionaire Clive Palmer has hit Chinese conglomerate CITIC with a huge claim for unpaid royalties.

CITIC Pacific Mining chairman Chen Zeng at the company’s Sino Iron operation.

Billionaire Clive Palmer has hit Chinese conglomerate CITIC with a claim for $941.5m in unpaid royalties in the latest twist in a legal battle once likened to Shakespearean tragedy Macbeth by a Supreme Court judge.

Mr Palmer is claiming the unpaid royalties on 134 million tonnes of ore he says CITIC “trashed” at its $US12bn Sino Iron magnetite operations in Western Australia’s Pilbara region.

He claims the ore is low-grade material that should have been processed. CITIC said it was just waste rock.

CITIC’s Australian subsidiary, CITIC Pacific Mining, said Mr Palmer’s $941.5m claim was another distraction as it pursued him for more land for mining at Sino Iron.

CITIC moved to slash production by a third to 14 million tonnes last year and warned that 3000 jobs were at risk as Mr Palmer maintained it needed to pay to access more land on tenements held by his private company, ­Mineralogy.

Royalties from CITIC and its subsidiaries propelled Mr Palmer to No.6 on this year’s The List – Richest 250 compiled by The Australian. His fortune, estimated at $22.3bn, is thought to be growing by about $450m a year in royalty payments stemming from the biggest Chinese investment on Australian soil.

Mr Palmer is using part of his wealth to bankroll his Trumpet of Patriots political party as it campaigns for the federal election on a platform of reducing China’s influence in Australia, ditching Welcome to Country ceremonies and slashing immigration levels.

His Trumpet of Patriots campaign has raised national security fears about CITIC’s control of the Cape Preston port facilities and an airstrip attached to the Sino Iron operation.

The billionaire said he would fly from Perth to Canberra on Thursday to announce where Trumpet of Patriots intended to direct its preferences.

Clive Palmer outside the WA Supreme Court on Wednesday.

Lawyers acting for CITIC were expected to cross-examine Mr Palmer in the WA Supreme Court on Wednesday, but judge Michael Lundberg knocked back the request.

Speaking outside the court, Mr Palmer said agreements between CITIC subsidiaries and Mineralogy stipulated that magnetite ore mined by the Hong Kong-listed entity had to be processed if it was more than 17 per cent iron.

“The rights granted to them is to mine magnetite ore for particular purpose of processing it into a concentrate to ship to China,” he said. “So, they have mined the ore and just kept the high-grade ­material. They processed it and threw the rest away, and that just wastes WA resources.”

Mr Palmer alleges that instead of processing low-grade ore, CITIC treated it as waste and used it in civil construction and to build tailings dam embankments.

CITIC has dragged Mineralogy to court as it seeks access to more land at the Sino Iron operations it says have run out of space.

“Mineralogy’s attempts to require the CITIC parties to pay royalties on waste is nothing new,” CITIC Pacific Mining said.

“We have been calculating and paying royalties to Mineralogy on magnetite ore taken, consistent with the court’s determination, for almost 12 years.

“These new claims are an unnecessary distraction from more important issues – specifically Mineralogy’s ongoing refusal to support the submission of project proposals critical to the continuity of the project and to thousands of local jobs.”

It is understood CITIC Pacific Mining’s longstanding chairman and chief executive, Chen Zeng, is departing with multiple legal disputes with Mr Palmer still before the courts.

CITIC said last month that Sino Iron remained profitable despite production cuts.

The majority Chinese state-owned entity blames Mr Palmer for declining to release more land covered by tenements held by Mineralogy. He argues that CITIC wants access to more land covered by Mineralogy tenements without paying for it.

Mineralogy is seeking to add its counterclaim for $941.5m to legal action started by CITIC.

In an affidavit sworn on March 24, Mr Palmer said Mineralogy only found out in January that CITIC had opted not to process large volumes of lower-grade ore.

He said evidence from CITIC witnesses and mine plans submitted to the court showed it had not been processing ore with an iron content of greater than 17 per cent as required under a deal to operate on Minerology tenements.

CITIC moved to cut production at Sino Iron by a third to 14 million tonnes last year, blaming Mr Palmer for refusing to make more land available. The WA government has consistently sided with CITIC in the dispute.

In a 2023 ruling, judge Ken Martin suggested it would not be unreasonable for Mr Palmer to seek a payment in the order of $750m in return for access to additional land.

Justice Martin also quoted a line from Macbeth – “I’ll fight till from my bones my flesh be hacked” – in summing up legal battles between CITIC and Mr Palmer over the past decade.

Originally published as Clive Palmer slaps China’s CITIC with huge unpaid royalties bill in latest twist in legal battle