Clive Palmer tells China partner Citic he’s ready to end ore war

Former federal MP Clive Palmer has offered a surprise olive branch to his estranged Chinese business partner Citic.

Clive Palmer leaves the Federal Court in Brisbane.

Clive Palmer has offered a surprise olive branch to his estranged Chinese business partner Citic, in what appears to be an effort to save the $10 billion-plus Sino Iron project in Western Australia and the potentially lucrative royalties that go with it.

The former MP issued a statement yesterday saying he was ready to work with Citic to ­“resolve any matters that were ­affecting” the Sino Iron project.

The huge iron ore operation represents the single biggest ­potential source of income for Mr Palmer due to the disputed royalty rights he holds over the project, but Citic has in recent months warned it could be forced to close it due in large part to several legal battles with its partner.

Mr Palmer has previously been vicious in his attacks on Citic, famously using an appearance on ABC’s Q&A to describe the company’s executives as ­“Chinese bastards” who “shoot their own people”.

His private company Mineralogy has bombarded Citic with legal notices threatening to terminate Citic’s rights at the project, and most recently has been withholding its consent to open new areas of ground to increase production.

Mr Palmer said he hoped to meet Citic executives: “I hope the chairman will take the time to meet with me personally to discuss all matters Citic Limited is concerned with and how we can assist Citic in achieving its commercial objectives.

“We can achieve much more by working together for the ­people of Western Australia and China. As Winston Churchill once said: To jaw-jaw is always better than to war-war.”

Mr Palmer’s change of heart comes less than a week after Citic told the Hong Kong Stock ­Exchange that it could close Sino Iron if there was no turnaround in the company’s fortunes.

Citic also announced it was again writing down the value of its investment in Sino Iron by up to $US1 billion ($1.3bn), echoing a warning in January that the mine could shut within months if Mr Palmer and Mineralogy failed to approve 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 cashflow.”

It is unclear what impact Mr Palmer’s conciliatory tone will have on the many legal battles ­between Mineralogy and Citic that are winding through the West Australian court system.

The pair are moving towards a trial to establish whether ­additional royalties are due from Citic to Mr Palmer, with the WA Supreme Court recently ordering Citic to pay Mineralogy a $US6 royalty on each tonne of production as an interim measure until the royalty dispute is settled.

A permanent order of $US6 per tonne could prove fatal to the project, which is continuing to bleed cash despite the recent rally in iron ore prices.

The Supreme Court last week revealed that Mr Palmer’s Mineralogy had less than $2 million in cash left to its name.