New chapter in Palmer-CITIC war

Nick Sas

Clive Palmer's Mineralogy has stepped up its war with CITIC Pacific, issuing it a termination notice on the Chinese company to fix its "defaults" within 90 days or suffer termination of the right to mine and use the port at the Pilbara project.

In yet another chapter in the long-running war between the two companies, Mineralogy issued a press release this morning declaring another deadline.

The latest move comes after Mr Palmer's company issued a 21-day termination notice on September 12, which was later rejected by the WA Supreme Court.

The Chinese Government-backed CITIC has a contract to export magnetite concentrate from the Sino Iron project, while Minerology gets a royalty from the production coming from the mine.

However a CITIC spokesman said the 90-day termination notice was not new, and was simply one of about 30 or so other notices of default lodged in September.

The move has been described by CITIC as just another tactic employed by Mr Palmer.

Mineralogy this morning also accused CITIC of hiding the "huge losses" of the Sino Iron project from the market.

"Citic Limited continues to suffer major loses from the Sino Project," the company said in a statement.

"Mineralogy believes the only reason CITIC Limited took over CITIC Group was to create a much bigger balance sheet to hide the huge losses of the Sino Iron project from the market and the Chinese Government.

"Serious questions need to be asked by all shareholders of CITIC Limited including the Chinese Government as how a project (with a capital cost based on fixed price lump sum contract of $1.5 billion dollars as set out in CITIC Limited notice to the market on March 31, 2006) was not delivered in three years and now eight years later is still not complete or in full production and has cost CITIC Limited over A$10 billion

The federal MP is still engaged in a legal battle with CITIC, which is seeking compensation over $12 million it claims was misappropriated by Mineralogy and Mr Palmer.