CITIC has had its appeal case against Clive Palmer’s Mineralogy rejected, forcing the Chinese company to pay royalties from its iron ore project in Pilbara, Western Australia.
The decision was made in Western Australia’s Court of Appeal where three judges unanimously denied the Chinese state-owned company’s appeal of paying $US10 ($14.50) a tonne from its Sino Iron project to Palmer’s Mineralogy.
CITIC built its Sino Iron project on a land owned by Mineralogy, with both parties disputing the payment of royalties.
Mineralogy and CITIC originally agreed to base payments on the annual benchmark iron ore price, however a ruling in 2017 altered this to base royalties on the iron ore spot price.
As a result of that ruling in the WA Supreme Court, CITIC were forced to front up $US149.4 million in back-payments.
The latest decision was claimed by Palmer to be well overdue after over five years of litigation with CITIC.
“During these five years, CITIC continually just took the ore. Those funds not paid at that time to Mineralogy would have been used to keep Queensland Nickel open and 3000 jobs in North Queensland would not have been lost,’’ Palmer said.
The mining magnate also pointed out that Mineralogy paid $44 million in tax this year, while CITIC had taken more than $4 billion in Australian ore and hadn’t paid tax to the Australian tax office.
Palmer expressed disappointment in the actions of the WA government, claiming it gave CITIC “commercial advantage”.
“Why does the WA Government give CITIC a 50 per cent discount on royalties costing the WA people hospitals, schools and its AAA rating?” he said.
“Why is the WA Government interfering in a commercial transaction and not simply allowing the rule of law to apply equally.”
CITIC was “disappointed by the outcome”, adding that it would “continue to do everything possible to put Sino Iron on a long-term sustainable footing”.
The company was carefully considering the reasons for the judgement.