Chinese miner accuses Clive Palmer’s companies of ‘contractual blackmail’

CITIC’s Sino Iron mine is facing an ‘existential problem’ as Clive Palmer continues to refuse to sign off on key approvals, a court has been told.

Australian billionaire businessman Clive Palmer. Picture: Rohan Kelly

Clive Palmer’s private company engaged in “contractual blackmail” when it refused to sign off on the plans of its estranged Chinese business partner, a lawyer for the group has said.

Prominent Sydney barrister Noel Hutley, SC, representing giant Chinese conglomerate CITIC, told the Western Australian Supreme Court on Wednesday that Mr Palmer’s refusal to progress CITIC’s applications to expand the footprint of its Sino Iron operation in the Pilbara meant the project was facing an “existential problem”.

“The problem is we face a crisis,” Mr Hutley said.

“This giant project of state significance, which was entered into to create royalties for the state, to create employment in the state … faces an ultimate terminus point if we don’t have some expanded program.”

Sydney barrister Noel Hutley, SC, is representing the Chinese conglomerate CITIC.

The comments came as CITIC argued for an expedited hearing to determine whether Mr Palmer and Mineralogy should be compelled to sign off on the latest mine continuation plan put forward by CITIC for the Sino Iron mine.

CITIC last year lost a Supreme Court trial into whether Mineralogy should have to sign off on an earlier mine continuation plan drafted by the company back in 2017. That earlier plan involved the CITIC operational area extending into areas outside of the current permitted area, with Justice Kenneth Martin finding that a demand from Mineralogy for CITIC to pay it $US750m for access to the additional land was not “outlandishly out of place”.

But the judge flagged that there were unlikely to be any such requirements if CITIC were to put forward a plan that remained wholly within the existing permitted area. CITIC has since drawn up a plan in line with that finding, but Mineralogy is still refusing to sign off on that scaled-back proposal.

Justice Martin’s judgment from last year remains under active appeal.

CITIC earlier this year warned that it would be forced to slash jobs at the Sino Iron mine and reduce output by a third if Mr Palmer did not agree to submit environmental and other documents for approval shortly.

Mr Hutley argued that the grounds advanced by Mineralogy for refusing to sign off on the latest mine continuation plan – namely separate legal claims lodged by Mineralogy arguing that CITIC was liable for billions of dollars of compensation relating to the collapses of Mr Palmer’s Queensland Nickel and Palmer Petroleum businesses – were irrelevant to the matter and could lead to CITIC being “held hostage”.

A haul truck at CITIC's Sino Iron operations.

He said the state agreement in place over the project – which includes an obligation on the parties to ensure the mine’s continuous operation – was the “apex agreement” that sat over the top of all other contracts at the project.

CITIC and Mineralogy have been at each other’s throats in court for well over a decade as they sort through the various legal battles to emerge from the Sino Iron agreement.

Royalties from the mine have made Mr Palmer a billionaire, but the mine has been a costly and frustrating venture for CITIC in the face of early cost overruns and delays and, now, the ongoing legal battles with Mineralogy.