A major rift is emerging between Asia Iron's Australian staff and its major Chinese backer amid rumours the state-owned enterprise is considering ditching the workforce.
In an open letter to the company's board and major stakeholders late last week, staff expressed concerns about internal disputes that "engulf the team", and a lack of transparency in the company's decision-making.
The letter, seen by _WestBusiness, _said they were worried about corporate governance issues and that all staff were not being treated fairly and "according to the law".
Signed by 80 per cent of Asia Iron's Australian staff, it calls on the board to "confirm the importance to the company of being a good corporate citizen in WA, and that it will ensure all things will be done according to the law and good corporate governance".
With the bulk of development approvals in place, Asia Iron is still seeking funding for its $3 billion Extension Hill project, which would export 10 million tonnes a year of magnetite through Geraldton. The company is 60 per cent owned by Chinese state-owned steelmaker Chongqing Chonggang Minerals Development and 40 per cent by Hong Kong's Sinom Investments.
Sources familiar with the situation say Asia Iron's local office is plagued by growing rumours CCMD is drawing up plans to sack workers in favour of more direct control by the Chinese company.
They say staff are concerned the advice of experienced local managers is being bypassed by political manoeuvring at CCMD, and project decisions are being made behind closed doors.Asia Iron was once pegged as one of the major foundation customers for the Oakajee Port and Rail project. Its plans to develop the project were thrown into disarray mid-last year when the high-profile Chongqing political leader Bo Xilai was arrested and put on trial accused of corruption. CCMD has subsequently reaffirmed its intention to develop the project.