Clive Palmer’s geologist’s ‘expert evidence’ dismissed by Federal Court
A judge delivers scathing findings on the “bizarre” and “unexplained” reports by Clive Palmer’s geologist.
A judge has delivered scathing findings about the “unexplained and sometimes bizarre” reports by Clive Palmer’s geologist, whose haphazard analysis of iron ore tenements helped deliver the tycoon a $US415 million Chinese windfall.
Federal Court judge James Edelman’s findings raise serious questions about Mr Palmer’s West Australian tenements from as early as 2004 when the geologist, Arnold van der Heyden, produced his first reports as Mr Palmer was seeking taxpayers’ funds and investors to develop a multi-billion-dollar project.
Justice Edelman found attempted estimates now of the resource potential of the tenements “would depend upon Mr van der Heyden’s reports having some degree of reliability. They have none.”
The Australian has obtained contradictory affidavit material by the geologist, whose conclusions about the iron ore were described in the judgment a fortnight ago as “meaningless”.
Mr van der Heyden’s reports estimating the quality and scale of magnetite iron ore in Mr Palmer’s tenements have been repeatedly cited by the leader of the Palmer United Party, and used to buttress prospectuses and other documents for his companies.
His purported wealth on paper is largely tied to these tenements at the centre of a costly and ongoing row with the Chinese government-owned Citic, which has spent about $10 billion developing the project after paying Mr Palmer $US415m.
Mr Palmer has previously claimed that his company Mineralogy “has more (iron ore) than BHP and Rio combined”, while his website describes “the 160 billion tonnes of magnetite iron ore that Mineralogy owns”.
Mr van der Heyden, who worked for Mr Palmer and Mineralogy as a consultant geologist for a decade, did not respond to attempts to contact him for comment.
He was subjected to withering questioning in the Federal Court after being called by Mineralogy as one of its expert witnesses on the iron ore content of the tenements.
Mr van der Heyden’s first affidavit included a report for Mineralogy dated 2004 but Justice Edelman ruled that it was “misleading” as “it was produced at some unknown later time by (the geologist) possibly with additions from unknown persons”.
In a second affidavit, there were six versions of the purported 2004 report that “differed in a number of significant respects from each other and from the initially tendered version”.
After watching Mr van der Heyden being questioned in the witness box, Justice Edelman decided to exclude his evidence “in its entirety”. The Sydney-based geologist prepared drafts of his reports about the mineralisation for Mr Palmer’s company and in response said they “would suggest corrections but ultimately what is in the report is up to me”.
He said he would have accepted Mineralogy’s suggestions only “if I believed them to be true”.
Justice Edelman ruled that none of the reports, affidavits and oral testimony of Mr van der Heyden could be accepted as evidence.
He ruled that a purported 2004 report by him had “numerous figures including amounts of magnetite ore in tonnes and the iron percentage of various zones and domains” — but these were not connected to verifying data.
A categorisation of “potential resources” relied on the digitising of outcrop maps.
There was doubt about whether his report, dated 2004, was actually produced several years later.
The section of the 246-page judgment dealing with Mr van der Heyden shapes as a major problem for Mr Palmer in his efforts to prove that the iron ore tenements, which have been a financial disaster for the Chinese, are valuable.
The geologist accepted a “general lack of independent quality control and quality assurance measures for drilling, sampling and assaying”, and that checking and verification of the historical data provided to him by Mineralogy was necessary — but he did not check it.
There was hardly any drilling over a vast area to justify claims of 160 billion tonnes of magnetite iron ore. “Nor was any person called by Mineralogy to establish the accuracy or authenticity of that historical data,’’ Justice Edelman said.
“Even as an expert geologist, Mr van der Heyden properly accepted that his 2004 report was ‘an extremely confusing document’ and that it was ‘misleading’. For the reasons I have given above, that assessment is correct. And the confusion and misleading nature of the 2004 report infects the 2005 report and the 2011 report.”
Mr Palmer did not respond to questions from The Australian.