As court rejects CITIC payment

Australian tycoon dealt blow

GMT 08:38 2015 Tuesday ,08 December

Arab Today, arab today Australian tycoon dealt blow

Australian mining tycoon Clive Palmer
Sydney - Arab Today

Australian mining tycoon Clive Palmer has been dealt a blow in a long-running legal battle with Chinese conglomerate CITIC after a court rejected a Aus$48 million ($35 million) payment, threatening the collapse of a key nickel refinery.

Palmer's mining firm Mineralogy is locked in a lengthy legal dispute the royalties it says are owed by Hong Kong-based CITIC Pacific relating to the Sino Iron project in Western Australia's Pilbara region.

CITIC is mining for magnetite iron ore on Palmer's sprawling tenements in resource-rich Pilbara under a 25-year lease.

The two companies have traded barbs over the feud, with the flamboyant tycoon blasting Chinese politicians as "mongrels" last year, while a Chinese state-run newspaper labelled his comments as "rampant rascality".

Mineralogy argued in court that if the multi-million-dollar advance on royalties was not granted, Queensland Nickel -- a separate business also owned by Palmer -- would "suffer irreparable harm" and risk hundreds of jobs, highlighting the perilous state of some firms as metals prices flounder.
Nickel prices have been hit hard by the global commodities rout, tumbling more than 40 percent this year to fall to their lowest levels in more than a decade.

Despite the plea, the bid was rejected by the Supreme Court of Western Australia late Monday.

Justice Paul Tottle said that while Mineralogy claimed Queensland Nickel was "experiencing a liquidity crisis" and needed an injection of money to "avoid closure", the refinery's perilous position might be exaggerated.

He added that the request for payment was "highly unusual" because the court case was not yet resolved.

- 'Full facts' needed -

Palmer said Tuesday he met with Queensland state Treasurer Curtis Pitt over the future of the nickel refinery.

He said only "minimal assistance" was needed from the government to help the business until prices picked up, which he expected to happen in mid-2016.

The Australian Broadcasting Corporation reported the request was for about Aus$50 million.

But Queensland premier Annastacia Palaszczuk told ABC her government needed the "full facts" before any decision was made.

CITIC's spokesman in Australia Rob Newton said his company had paid millions of dollars to Palmer and Mineralogy over the years.

"It's our view that how Mr Palmer chooses to spend this money and how he chooses to manage his other ventures –- whether it's golf courses, nickel mines, soccer teams, the Titanic 2 or robotic dinosaurs -- is a matter for him," he told reporters outside the court Monday night.

Besides his mining and political interests, Palmer is well-known for plans to build a full-scale replica of the Titanic and a golf course replete with robotic dinosaurs in Queensland.

CITIC Pacific, which has interests ranging from iron ore mines to property, recently assumed Chinese conglomerate CITIC Group's assets as part of a move to list in Hong Kong.
Source: AFP

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