Royalty issue in Aussie court
Source: Bloomberg News |
April 24, 2013, Wednesday
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Print Edition
Print Edition
AN Australian judge expressed reluctance to give billionaire Clive Palmer the go-ahead to kick CITIC Pacific Ltd off his land after the Chinese company spent A$7 billion (US$7.2 billion) building a mine.
Palmer's Mineralogy Pty sued in Western Australian state court in Perth seeking a court order that would let it terminate CITIC Pacific's Sino Iron unit's mining rights and site-lease agreements at Palmer's Pilbara property for failing to pay royalties.
"I would have real difficulty making the declaration as sought," Western Australian Supreme Court Justice James Edelman said at the conclusion of a hearing yesterday. He ordered both sides to file additional evidence in writing by Friday whether Palmer can exercise his right to end the deal with CITIC Pacific.
The dispute centers over a 2008 deal giving CITIC Pacific the right to develop the biggest magnetite iron ore project in Australia on Palmer's land. CITIC Pacific agreed to start paying royalties when it had taken possession of the ore, which it says occurs after it's crushed and weighed. Palmer claims the royalty is due when the ore is taken from the ground.
CITIC Pacific, controlled by China's biggest state-owned investment company, will pay the royalty if it's found liable, Charles Scerri, the company's lawyer said.
"US$7 billion has been spent on this mine," he said, referring to the project that's estimated to cost US$8 billion. It would be "ludicrous" to try and avoid paying the royalty and losing the right to the mine, he said.
Last week, CITIC Pacific said the mine, originally slated to begin output in the first half of 2011, wouldn't make its first delivery of iron ore concentrate until the second half of May.
Palmer's Mineralogy Pty sued in Western Australian state court in Perth seeking a court order that would let it terminate CITIC Pacific's Sino Iron unit's mining rights and site-lease agreements at Palmer's Pilbara property for failing to pay royalties.
"I would have real difficulty making the declaration as sought," Western Australian Supreme Court Justice James Edelman said at the conclusion of a hearing yesterday. He ordered both sides to file additional evidence in writing by Friday whether Palmer can exercise his right to end the deal with CITIC Pacific.
The dispute centers over a 2008 deal giving CITIC Pacific the right to develop the biggest magnetite iron ore project in Australia on Palmer's land. CITIC Pacific agreed to start paying royalties when it had taken possession of the ore, which it says occurs after it's crushed and weighed. Palmer claims the royalty is due when the ore is taken from the ground.
CITIC Pacific, controlled by China's biggest state-owned investment company, will pay the royalty if it's found liable, Charles Scerri, the company's lawyer said.
"US$7 billion has been spent on this mine," he said, referring to the project that's estimated to cost US$8 billion. It would be "ludicrous" to try and avoid paying the royalty and losing the right to the mine, he said.
Last week, CITIC Pacific said the mine, originally slated to begin output in the first half of 2011, wouldn't make its first delivery of iron ore concentrate until the second half of May.
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