Sat, Sep 27, 2014 - Page 15 News List

Palmer seeks to end CITIC Australian mining rights

AFP, SYDNEY

Australian tycoon Clive Palmer’s Mineralogy yesterday served a notice on Chinese-owned CITIC Pacific (中信泰富) to terminate its mining rights to a multibillion-dollar iron ore project in the latest clash between the two firms.

Mineralogy director Clive Mensink said the 21-day notice of termination came after his company served a default notice on Hong Kong-based CITIC Pacific in July 2012.

“Not only has CITIC Pacific Limited failed to rectify the defaults in the notice, the directors of CITIC Pacific failed to declare the default notice to the market in Hong Kong and may have breached the law,” Mensink said in a statement.

He added that the termination notice was served on Sept. 12, but CITIC Pacific’s directors had “failed to make a public announcement or inform the market.”

Mensink called for the Hong Kong Stock Exchange and authorities to investigate.

CITIC in Australia said the Supreme Court of Western Australia was scheduled to hear an application later yesterday for an injunction to stop Mineralogy from issuing such notices.

The company added in a statement that “in addition to the US$415 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.”

Palmer, also a politician who wields crucial balance of power votes in the upper house Senate, told ABC radio that Mineralogy’s 30 to 40 meetings with CITIC failed to resolve their issues and led to the termination notice.

“This is a A$10 billion [US$8.8 billion] project involving many hundreds of millions of dollars, they have failed to pay their royalties to us and they have shipped over A$200 million worth of products to China and not paid for it,” he said.

Palmer is locked in a long-running legal dispute over royalties and port operations with CITIC Pacific relating to the Sino Iron magnetite project in Western Australia, a partnership with China’s state-owned Metallurgical Group Corp (中冶集團).

CITIC is mining for magnetite iron ore on Palmer’s sprawling Mardie Station cattle farm under a 25-year lease in what has been described as China’s biggest single investment in a resources project in Australia.

CITIC Pacific recently assumed Chinese conglomerate CITIC Group’s assets as part of a move to list in Hong Kong.

The city’s regulator, the Securities and Futures Commission, brought a case against CITIC and five of its former directors this month for allegedly misleading investors, relating to when it became aware of a multibillion-dollar loss from a currency bet.

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