The legal war between Fairfax MP Clive Palmer and his estranged business partner Citic Limited has gone to another level, with Mr Palmer’s company Mineralogy seeking $10 billion in damages from the Chinese giant.
In the latest of many lawsuits between the two companies over the past three years, Mineralogy is suing Citic over what it claims to be a lack of royalty payments from Citic’s Sino Iron magnetite project in WA, which was built on Mr Palmer’s leases.
The two companies have previously argued over the royalty issue, which has been complicated by the agreement signed between the two companies in May 2006 which relies on the annual benchmark iron ore prices struck by BHP Billiton and Brazilian miner Vale to calculate one of the royalties owing to Mineralogy, known as “Royalty B”.
With iron ore now traded on daily market terms rather than on annual contracts, there is no way to calculate Royalty B. The two companies have since fought over numerous things, including access to the port used by the loss-making Sino Iron project and the shifting of millions of dollars out of certain accounts, but they now appear set to return to the original issue of royalties.
“The simple fact is that Citic Limited continues to export iron ore concentrate from Western Australia and refuses to pay Mineralogy the royalty,” said Mr Palmer.
A spokesman for CITIC Pacific Mining said the matter was already before the Supreme Court of Western Australia.
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