Oct. 16 (Bloomberg) -- Citic Pacific Ltd.’s iron ore project in Australia can’t be stopped by Clive Palmer’s Mineralogy Pty over an alleged default that is part of a royalty dispute, a judge ruled.
Western Australia Supreme Court Justice James Edelman in an Oct. 14 ruling granted Citic Pacific’s Sino Iron Pty and Korean Steel Pty an injunction barring Palmer from taking steps to halt the project after Mineralogy accused the Chinese state-owned steelmaker and its units of default for failing to pay A$287,000 ($273,000) in royalties.
Citic Pacific has spent about A$7 billion on Australia’s biggest magnetite iron-ore development and employs as many as 2,800 people on the project on Palmer’s property, Edelman wrote. Mineralogy stands to lose A$15,000 to A$25,000 from the alleged default on the royalty payment, the judge said. Mineralogy claims the royalties at issue will be worth A$9.4 billion over 30 years.
“The progression towards a final hearing has now been delayed by the considerable time, expense and resources which have necessarily been devoted to this application,” Edelman wrote. “The legal fees on this application must have vastly exceeded the potential loss to Mineralogy.”
Steve Connolly, a spokesman for Palmer, declined to comment on the ruling.
Citic Pacific said in an e-mailed statement it will continue “to take all necessary steps to protect our investment in this project.”
Mineralogy argued that Citic Pacific produced 19,000 tonnes of iron ore concentrate over three quarters and defaulted on royalties. The default gave Mineralogy the right to suspend or terminate the joint venture, the company said.
Citic Pacific said the royalty calculation isn’t accurate. The issue is scheduled to be tried later. Citic Pacific had said it would pay any royalty determined to be owed by the court, according to the judgment.
The case is Mineralogy Pty v. Sino Iron Pty. CIV1808/2013. Supreme Court of Western Australia (Perth).
To contact the reporter on this story: Joe Schneider in Sydney at email@example.com
To contact the editor responsible for this story: Douglas Wong at firstname.lastname@example.org