Titanic Tycoon Wins Royalty Dispute With Citic Pacific
Clive Palmer, the Australian mining entrepreneur who plans to build a replica of the Titanic, won a lawsuit against Citic Pacific Ltd. (267) over the timing of royalty payments from an $8 billion iron ore mine.
The fees were owed to Palmer for the use of his land when the ore was stockpiled, and not, as Citic Pacific claimed, after it went through initial processing, Western Australia Supreme Court Justice James Edelman said in a decision in Perth yesterday.
Palmer’s Mineralogy Pty had sued the Hong Kong-based steelmaker’s Sino Iron unit, claiming the company’s mining rights and site-lease agreements should be terminated for failing to pay royalties of A$400,000 ($392,000). Palmer withdrew the request to kick Citic Pacific (267) off his land following the trial, according to the judge.
Mineralogy filed papers “saying the parties had agreed to follow a particular course of conduct if Mineralogy’s construction of the contracts were correct,” Edelman wrote, without elaborating on the agreement. The judge said that, as a result, it wasn’t necessary for him to rule on whether Palmer had the right to terminate the mining lease.
Citic Pacific will study the judgment and consider its next step, the company said in a statement. The ruling won’t have an impact on the development of the mine, Citic Pacific said. The company is “willing and able to pay royalties, when the liability to do so arises,” it said during the trial.
The judgment shows Mineralogy is entitled to royalties from Citic over the life of the mine, which are worth hundreds of millions of dollars, Palmer said in an e-mailed statement today.
“It sends a clear message to foreign companies operating in Australia that contracts made under Australian law will be enforced by the courts,” Palmer said.
The development, the biggest magnetite iron ore project in Australia, has been beset by problems including a budget that swelled by almost four times the initial amount and wrong currency bets that cost HK$14.6 billion ($1.9 billion) in 2008.
The mine, originally scheduled to begin output in the first half of 2011, wouldn’t make its first shipment of iron ore concentrate until the second half of May, Citic Pacific said last month.
Palmer has another outstanding dispute with Citic Pacific over royalties, claiming in a New South Wales Supreme Court lawsuit that his company was owed A$200 million. Citic Pacific won a court order on April 30 to have the dispute moved to Perth from Sydney.
Palmer has an agreement with Nanjing-based CSC Jinling Shipyard to build a 21st-century replica of the Titanic. CSC Jinling is also building four 64,000 deadweight-ton bulk carriers for the Australian entrepreneur, whose investments include golf courses, hotels, a soccer team and a stud horse.
The case is Mineralogy Pty v Sino Iron Pty. CIV 2338/2012, Supreme Court of Western Australia (Perth).
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