Citic Pacific has filed an injunction with the Supreme Court of Western Australia to stop Clive Palmer from terminating mining rights on its fledgling iron ore mine in the Pilbara.
Palmer, who owns the land on which the $6.7 billion Sino Iron mine is built, is threatening to terminate Citic’s mining rights because of a disagreement on royalty rates.
According to The West Australian Palmer wants to receive royalties for ore already extracted by Citic, and the miner is attempting to defer payment.
“We have a standard right-to-mine agreement,” Palmer said.
“In the agreement it says they pay a royalty when ore is taken. We would say that word ‘taken’ means when you mine it — they would say it means when you take it from Australia.”
According to The West Australian Palmer is seeking royalties on around seven to ten megatonnes of ore already moved by Citic since around 2008.
According to The Australian Citic have previously tried to reduce the royalty rate, as falling prices and rising costs hurt the prospects of its marginal mine.
Earlier this year Citic apologised to its investors after delays saw it miss its initial mining deadline.
It blamed an “acute shortage” of workers and a lack of experience with its lead contractor for the delay.