By Aja Styles
Mining billionaire Clive Palmer has failed to delay a nine-week trial over $30 billion worth of iron ore contracts between his company Mineralogy and CITIC Group’s West Australian interests.
On the first day of the trial, Mr Palmer told the Supreme Court of WA that he would be “denied natural justice” if he was not permitted documents that may be relied upon as evidence by CITIC Group’s Sino Iron and Korean Steel, which operates on Mineralogy’s Pilbara tenements in Cape Preston.
Clive Palmer’s Mineralogy will clash over CITIC’s $18 billion Sino Iron project in WA’s Pilbara, with CITIC Pacific ceo Chen Zeng.Credit: AFR
Mr Palmer is second defendant behind Mineralogy and represented himself in the proceedings, which Supreme Court Justice Kenneth Martin flagged meant being across the trial for the whole nine weeks.
Justice Martin said he didn’t want Mr Palmer appealing a decision based on procedural unfairness since he didn’t have a lawyer present, despite having the resources, and in not being available becoming “the architect of that problem”.
Mr Palmer, who appeared via videolink, said he understood, although he did have to leave the start of opening addresses for a medical appointment. He has since cancelled a National Press Club speech due to be held on Tuesday after developing “COVID-like symptoms”.
Asked on Monday why the rapidly adapting trial should be delayed, given some of the documents had already been made available to Mineralogy, which Mr Palmer controlled, Mr Palmer replied that Mineralogy’s legal counsel was very separate to him and he had not received anything from Mineralogy, nor CITIC.
Justice Martin told Mr Palmer that a ruling over the documents would be given once the Court of Appeal published its reasons behind a decision to allow part of the trial argument put by Mineralogy, coined the Fulcrum Purposes, to continue.
The Fulcrum Purposes in the trial related to Mineralogy not submitting a 2017 mining continuation plan, on behalf of the Cape Preston mine, claiming Sino Iron defaulted on paying site remediation funds to the Fulcrum Group in a tactic designed to exert pressure by depriving Mineralogy of cash flow.
Justice Martin said his understanding of the Court of Appeal decision was that there was no conspiracy or unlawful act but the “mining continuation plan proposal process was, in reality, being used as a lever to advance their objectives of altering the primary contractual agreements between the parties ... then that’s perfectly understandable” as forming part of the trial.
But Justice Martin would not rule over the discovery of related documents until the full decision of the Court of Appeal was published.
Sino Iron’s magnetite iron ore processing plant in Cape Preston in the Pilbara, WA, is run by CITIC Pacific Mining under disputed lease agreements with Mineralogy billionaire Clive Palmer. Credit: CITIC
He also told the court that it was only Mr Palmer, not Mineralogy, who wished to further delay the urgent trial over the documents and it was not reason enough to waste court resources that went into such a “megatrial”, which included 948 documents making up 84 lever arch files of materials.
Justice Martin said the viability of Sino mine at Cape Preston rested on more space to store waste, more access to magnetite in the mine pit, and more storage at the port for processed magnetite concentrate.
But its claim against Mr Palmer’s company was because Mineralogy prevented those plans in 2017 by not submitting the mining continuation plan.
He did leave a window open to Mr Palmer to apply for a delay in proceedings once the reasons of the Court of Appeal were published.
During opening submissions on Monday, Sino Iron lawyer John Karkar QC said the state agreement with CITIC mining parties and Mineralogy was for the Sino Iron mine to result in a continued operation that would deliver jobs to 70,000 in construction, 1000 in operations, $2 billion investment into WA and $1 billion of exports every year for 30 years.
That amount doubled with Sino Iron’s acquirement of Korean Steel’s access to iron ore reserves over the same tenements, and CITIC also sought a further $1 billion worth of ore as part of expansion plans.
Mr Karkar said the WA government would receive about $1.5 billion royalties and the Commonwealth “significant” company tax based on an estimated net profit of $US400 million a year during Sino’s operation.
“And for the first time in Australian history, low grade magnetite iron ore deposits – this is very important to China – will be developed by processing Australian minerals in Australia, pressing a new and exciting market for Australia,” he said.
He said it was always part of the original plan to submit further proposals after the first five years of the project to enable continuation, including further access and use of land, but Mineralogy breached the contract by not submitting the mining continuation plan tenure to the state government in 2017.
“That was a capricious refusal to deny us to conduct a program of works on tenements on which we were bound by subleases,” Mr Karkar argued.
He said Sino Iron was also claiming unconscionable conduct by Mineralogy under Australian consumer protection laws.
He said the CITIC parties had to undertake costly workarounds, including almost doubling waste drop heights above safe and efficient levels.
“It is so obvious the very significant impact of suspension not only on the CITIC parties but also the project’s many stakeholders, including the state and Mineralogy itself,” Mr Karkar said.
“In short, everyone loses.”
The court plans to tour the mine site early next month, which Mineralogy and Mr Palmer opposes.
The trial is set to continue until May 6.