Clive Palmer’s company Mineralogy could lose its right to operate security measures at a new multi-billion dollar port in Western Australia.
The Department of Infrastructure and Transport is reportedly moving to strip Mineralogy of security operator rights at Cape Preston port near Karratha.
The port has been built to ship iron ore from a $7 billion mine being developed by the Chinese company CITIC Pacific, with Palmer’s company granted operations rights to the port in January as well as to look after the security of the port under Federal Laws.
The Australian reported the West Australian government is pressing for the rights to be revoked amid concerns over the company’s credentials with insiders claiming Mineralogy should not have been granted legal permission to run the port.
However Palmer points out changes to Federals Laws surrounding security would have no impact on the commercial agreements surrounding the operation of the port.
“Those Federal laws relate to the security of ports around Australia. They deal with matters such as terrorism and other security threats and in no way relate to the commercial operation of the port in a commercial sense," Palmer said in a statement.
“That appointment is separate from Mineralogy’s legal and commercial rights in the port under existing Western Australian state legislation with project proponents, including the CITIC parties amongst others.
“Those underlying commercial agreements have been in place since 2002. All assets vest in Mineralogy under the agreements scheduled to the Iron Ore Processing (Mineralogy Pty Ltd) Agreement Act 2002."
Palmer and CITIC Pacific are battling in Perth’s Supreme Court over a royalties dispute on the iron ore project, which is yet to export after huge budget blowouts and missed completion deadlines.
Palmer was set to receive royalties from the project after CITIC purchased the original tenements from him in 2006.
The Sino iron ore project has run into a spate of delays and cost blow-outs during the commissioning phase, and late last year the company blamed the skills shortage, bad weather, and the inexperience of its lead contractor for delays on the project.
The West Australian Government first sought to remove Mineralogy as a port operator in February, while CITIC has previously asked for reasons behind the appointment.
"We are aware of the issue and there is a process in place," Vivienne Ryan, a spokeswoman for the WA Department of Premier and Cabinet, said last night.
"We have nothing further to add."