Court halts Sino Iron termination

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 13 Oct 2014   Posted by admin


THE WA Supreme Court has blocked an attempt by Clive Palmer’s Mineralogy to terminate an agreement giving CITIC Limited mining rights at the $10 billion Sino Iron project.

Last month Mineralogy served Chinese-owned CITIC a 21-day termination notice on its right to mine iron ore at the Pilbara-based Sino Iron magnetite project, which began exporting late last year after lengthy delays and cost blowouts.

The partners have been locked in a fierce battle in the WA Supreme Court regarding royalty payments, which Mineralogy alleged had not been paid.
Mineralogy director Clive Mensink, Mr Palmer’s nephew, said CITIC had failed to address a default notice issued more than two years ago, relating to
billions of dollars in losses.

“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,’’ he said.

Mr Mensink said CITIC had failed to inform the market of the termination notice when it was issued on 12 September, prompting a public announcement from Mineralogy.

“The Sino Iron project has a capital cost of more than $8 billion and the failure of the directors to inform the market could be a criminal offence,’’ he said.
However, earlier this month the WA Supreme Court issued an injunction blocking Mineralogy from taking further action on the termination notice until a
hearing on 18 December.

In a statement, CITIC said Mineralogy had been restrained by the court or had undertaken to the court not to rely on several default and termination notices on three separate occasions in the past two years.

“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,” the statement said. “CITIC looks forward to this matter being resolved by the court.”