Clive Palmer’s Mineralogy moves to end Citic mining rights in WA

CLIVE Palmer’s Mineralogy is embroiled in a new legal battle after moving to terminate Citic Pacific’s rights to mine his iron ore in Western Australia.

CITIC Pacific is seeking an injunction to prevent a bid by Clive Palmer’s Mineralogy to terminate the Chinese state-owned enterprise’s rights to mine his iron ore in Western Australia.

The federal MP’s private company has served a termination notice on Citic, giving it 21 days’ notice that it will no longer be able to mine iron ore at the massive $8 billion Sino Iron project in the Pilbara.

Mineralogy said its decision followed governance and market disclosure concerns.

Mr Palmer is already embroiled in a legal battle with Citic, which is seeking compensation over $12 million it claims was inappropriately used by Mineralogy.

IN DEPTH: Palmer’s dispute with Citic

The termination notice was issued on September 12, after Citic allegedly failed to address matters raised in a default notice dating back to July 2012.

Citic said it was surprising Mineralogy would take the action and responded by making an application to the WA Supreme Court today for an injunction restraining Mr Palmer’s company “from taking further steps in reliance on these and other notices issued by Mineralogy”.

“Citic looks forward to this matter being resolved by the court.

“Mineralogy has been restrained by the court or has undertaken to the court not to rely on several default and termination notices on three separate occasions over the past two years.

“In addition to the $US415 million ($A449 million) paid by Citic to Mineralogy to acquire its rights at the Sino Iron project, all royalties that are owed and calculable have been paid in full by Citic to Mineralogy.”

Mineralogy director Clive Mensink said the company may lodge a complaint with regulators in Hong Kong, where the Chinese entity is listed, regarding the alleged disclosure breaches cited by Mineralogy.

In the separate legal row, Citic alleges Mr Palmer knowingly assisted in a breach of trust by re-directing money paid for port management services to other purposes, including advertising for the Palmer United Party in last year’s federal election.

Mr Palmer has strenuously denied the allegation, and lawyers for the MP told a Supreme Court hearing in Brisbane earlier this month that the money had been repaid.

The Sino Iron project began production later than planned after a dramatic cost blow out.

AAP