Western Australia’s state government could get dragged into the ongoing court battle between CITIC Pacific Mining and Queensland businessman Clive Palmer’s Mineralogy, which has escalated in recent days with fresh legal action being launched on both sides.
On Friday, CITIC Limited and its subsidiaries Sino Iron and Korean Steel launched Federal Court proceedings against Mineralogy and Mr Palmer over a series of approvals needed for the continued operation and expansion of the Sino Iron magnetite project near Karratha.
Sino Iron is covered by a state agreement, with the Western Australian government requested to be represented in the action.
The proceedings are the latest legal action over the $US12 billion development, which has been subject to a long-running dispute over royalties signed as part of the original mining agreement signed between CITIC and Mineralogy, which owns the land, in 2006.
CITIC Pacific Mining has shipped 50 million tonnes of magnetite concentrate from the mine since 2013, however, its continued operation hinges on further approvals to continue mining and processing.
Approvals needed include sub-lease tenure for new infrastructure and waste storage facilities.
Mineralogy has withheld its approval for any expansion or continuation proposal, despite repeated requests from CITIC since 2016.
“It is our firm view that Mineralogy’s ongoing failure and refusal to submit the proposals and take the other steps requested of it has caused, is causing and will continue to cause loss and damage to CITIC subsidiaries,” CITIC Pacific Mining chief executive Chen Zheng said.
“Initially this has led to significant increased costs in planning, developing and operating the project.
“The ultimate effect will be a substantial reduction in the scope of operations of the project.
“It may result in the suspension of those operations.”
Yesterday, Mr Palmer followed up CITIC’s action with a fresh legal claim of its own, over environmental rehabilitation funds for the project.
Mr Palmer claims CITIC should have placed $500 million into a remediation fund to provide funding for environmental rehabilitation.
Mr Palmer’s proceedings were lodged in the Supreme Court of Western Australia.