Chinese deny Palmer getting $500m iron ore royalty

Mining magnate and minor party leader Clive Palmer has come under fire from a Chinese resources company for claiming it is paying Palmer $500 million a year in iron ore royalties.

Mining magnate and minor party leader Clive Palmer has come under fire from a Chinese resources company for claiming it is paying Palmer $500 million a year in iron ore royalties.

Palmer made the claim while campaigning to be the prime minister in Melbourne on Sunday under his Palmer United Party.

But his claims were scorned at yesterday and a spokesman for the Chinese company refuted them.

“CITIC Pacific is not currently paying $500 million per year in royalties to Mineralogy, as claimed by Mr Palmer, and we do not know the basis for this claim.”

The Hong-Kong based company said the legal case over royalties from the unfinished Pilbara iron ore venture ‘are currently before the Australian courts, where we believe these issues will be dealt with in a fair manner’.

The Supreme Court of WA approved CITIC Pacific an injunction against Clive Palmer last year to prevent him from ceasing mining rights at the Sino iron mine in the Pilbara.

Palmer is under scrutiny as his businesses are currently losing tens of millions of dollars a year. Some have expressed environmental and safety worries for his main business, a Townsville nickel refinery, particularly during the rain season. It has a large tailings dam on the edge of the Great Barrier Reef.

If Palmer runs out of money to fix the issue and pay for remediation, taxpayers would have to foot the bill.

Earlier this year, he rejected claims by environmentalists his Yabulu nickel operation’s tailing dam would burst during the wet season.

It came a day after the WWF said the wet season would dams overfilling, and called on the premier to assist in preventing an environmental disaster.

But WWF later issued an apology for the ‘unfounded’ allegations against the nickel refinery in north Queensland.

In an affidavit from late April acquired by The Australian, Palmer contemplates closing the nickel refinery and fire staff, as his money reserves dwindles.

“I purchased the (nickel) refinery in the expectation that if it continued to run at a loss it could be funded as necessary from royalties received from (the iron ore project)…

“The continued operation of the (nickel) refinery, including the livelihood and employment of approximately 1000 employees and contractors, is dependent upon Mineralogy receiving royalties (from the iron ore project).”

Palmer said his company Mineralogy’s computer systems have been hacked and a laptop stolen after launching his political party, the AFR reports.

Queensland and Australian Federal Police were probing the violations, he said.

While he did not accuse any media organisation, he did correlate the fact that the information obtained for the laptop was now made public.   

Palmer announced the launching of his own political party for this year federal election in April, saying it will have candidates in 150 House of Representative and Senate seats.

Palmer bought the nickel refinery at a low price from BHP Billiton in 2009. But the affidavit revealed it was making a net loss before tax of ore than $58 million in the last financial year.

As nickel prices slide further, some at the Mineralogy and the refinery predict the current financial year losses would be much worse.

He was asked on Sunday how he intends to manage debt at the refinery.

“Because I earn $500 million a year in royalties in Western Australia from the Chinese.”

The Australian obtained confidential legal letters, in which Palmer alerted CITIC Pacific in March that ‘the livelihood of over 1000 employees (of his) group and associated companies depend upon’ obtaining the urgent payment of $200 million from the company, the ABC reported.

His letter also sent a dire message to the Chinese political leadership that if job losses were the consequence of his companies crumbling, it would do ‘irreparable damage to the goodwill’ between Australia and China.

His spokesman verified the letter was sent to CITIC Pacific three months ago but that this was no longer applicable.

It is not known whether Palmer obtain the $200 million.

Palmer told 60 Minutes in an interview in March that he was ‘making so much money now that he can’t spend it all’, before forming his political party.

The Brisbane Times recently reported Palmer saying he is 'uncorruptible' because he was already very rich.

Palmer asked his Brisbane-based lawyers, HopgoodGanim to threaten to take legal action against The Australian and coerce the paper to reveal its sources.

The law firm’s special counsel has ordered for the sources and ‘an undertaking to cease and desist from publishing any other confidential information concerning Professor Palmer’.

Palmer sent a text message yesterday to stop The Australian from obtaining any media release or alerts pertaining to him and his businesses.

But he accidently sent the text message to Andrew Cripps, the Mines Minister in the Campbell Newman-led Liberal National government, instead of sending it to his public relations manager Andrew Crook.

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