State-owned Chinese conglomerate CITIC and subsidiaries Sino Iron and Korean Steel have launched legal proceedings in the Australian Federal Court against magnate Clive Palmer and his company Mineralogy.
CITIC announced it was taking action “to compel the approval and submission of proposals critical to the operation of the Sino Iron magnetite project, south of Karratha”.
The Chinese company is also involving the Western Australian Government, which is represented as a key party in the action against Mineralogy.
CITIC Pacific Mining’s $16 billion Sino Iron project, around 100km from Karratha in the Pilbara, Western Australia, is among the largest magnetite iron ore mining projects in the country.
Proposed as a 40-year operation, Sino Iron’s economic impact assessment suggests that export earnings for Australia related to the project could top $100 billion.
CITIC, which has required approvals to permit further mining and processing at the site since 2016, claims that Clive Palmer-backed Mineralogy, the holder of the Sino Iron tenements, is withholding its approval on proposals related to the continuation of the mine.
“It’s 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 officer Chen Zeng said in a statement.
“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.”
Clive Palmer has subsequently started legal action against CITIC related to $500 million in environmental rehabilitation funds that Mineralogy claims CITIC has withheld from a remediation fund.