Judges deny $54m to Clive Palmer given his firm’s ‘precarious’ position

Clive Palmer has been denied a $54m cash injection after his estranged Chinese business partners won a court appeal.

Former MP Clive Palmer has been denied a $US40.5 million ($54m) cash injection after his estranged Chinese business partners won a court appeal.

The West Australian Supreme Court yesterday upheld Citic’s ­appeal against an earlier ruling that had ordered it to hand over millions in disputed payments to Mr Palmer while a wider, ongoing royalty ­dispute between the two was ­resolved.

Citic had already paid about $97m to the court following the earlier, now-overturned decision, half of which was due to go straight to Mr Palmer’s private company Mineralogy.

Before yesterday’s decision, Citic was also facing the prospect of paying an ongoing royalty of $US6 on each tonne of iron ore concentrate out of its Sino Iron project in Western Australia.

The payment had shaped as a substantial windfall for the former billionaire at a time when his other business interests are struggling.

It is a significant win for Citic, which previously had warned that the interim payment and ongoing $US6-a-tonne order could threaten the viability of the project.

In yesterday’s ruling, the judges agreed that Mineralogy’s financial position was “precarious” and “under a cloud”. They also found there was a “strong likelihood” Mineralogy would not be able to pay the disputed amounts back in the event it lost the looming court fight over royalties.

The judges rejected affidavit evidence from Mr Palmer attempting to demonstrate he had sufficient assets to meet any future repayment obligations.

“Mr Palmer’s statements as to the value and unencumbered nat­ure of the other properties are not admissible,” the judges said.

“Even if admissible, they lack any cogency.”

The fate of the Sino Iron project, which cost more than $10 billion to build after cost blowouts and lengthy delays, has been under a cloud in recent months as it struggles to break even.

Citic chairman Chang Zhenming said in the conglomerate’s annual report this week that the outcome of the disputes with Mineralogy would have a “major bearing on the future viability of Sino Iron”.

“While progress has been significant, we face ongoing challenges that go beyond the usual operational issues associated with such a massive industrial undertaking,” he said.

Additional reporting: AAP