Clive Palmer key to future of Citic iron ore mine

China’s Citic says the future of its Sino Iron project rests on the “co-operation” of its estranged partner Clive Palmer.

Citic’s Sino Iron project at Karratha in Western Australia.

Chinese giant Citic has warned investors that the future of its $10 billion-plus Sino Iron hinges on securing the “co-operation” of its estranged business partner Clive Palmer.

In a statement to the Hong Kong Stock Exchange last night, Citic announced it was taking another writedown of between $US800 million and $US1 billion on the value of its investment in Sino Iron.

It also indicated that the fate of the West Australian mine was in the balance, echoing the warning from its lawyer last month that the mine could be shut within months if Mr Palmer and his private company Mineralogy failed to sign off on key expansion approvals.

“To place Sino Iron on a long-term sustainable footing requires the co-operation of all stakeholders,” the company said.

“Citic will continue to work towards a resolution of matters in dispute with Mineralogy. The result will have a major bearing on the long-term viability of Sino Iron, its profitability and cash flow.”

It was recently revealed in WA’s Supreme Court that Mineralogy had less than $2 million in cash to its name.

Clive Palmer

The Sino Iron project represents the most likely path to significant income for Mr Palmer if he can resolve the long-running dispute with Citic over royalties at the mine. Those royalties could be worth tens of millions, if not hundreds of millions, of dollars a year to Mr Palmer.