CITIC bids to accelerate Palmer dispute

CITIC Pacific Mining has started its bid to fast track the legal proceedings against billionaire Clive Palmer's company Mineralogy, taking the matter to the Supreme Court of Western Australia.

Barrister Noel Hutley SC, on behalf of Hong Kong-based CITIC and its Australian subsidiaries Sino Iron and Korean Steel, today made his opening submissions before Justice Gary Cobby in the state’s Supreme Court.

Today’s legal proceedings mark the latest update in a long list of disputes between CITIC and Mr Palmer, and his company Mineralogy, over the Sino Iron magnetite project in the state’s Pilbara region.

CITIC lodged a writ in the Supreme Court earlier this year, seeking court orders for Mineralogy to agree to a set of interim proposals that would allow CITIC to mine in an expanded footprint at the Sino Iron site.

Mineralogy holds the tenement for the Sino Iron project site.

CITIC has asked the court to expedite the matter, while Mineralogy applied for a stay or halt of the proceedings amid ongoing appeals from the parties' previous dispute in the Court of Appeal.

Speaking to the court today, Mr Hutley said the Court of Appeal could take a significant amount of time to decide on the matter and objected to Mineralogy’s proposal to halt the proceedings.

“By that time, the project is constrained and will close,” he said.

“The crisis is this giant project of state significance which was entered into to secure royalties for the state and to secure employment is going to be constrained… and face an ultimate terminus point if we don’t have some expanded program.

“The mere fact that the Court of Appeal might be considering a matter that might not have been considered by a trial judge … is not reason for a stay, that happens every day of the week by the courts.”

CITIC last month announced on the ASX that it has reduced its annual production at the Sino Iron magnetite project because of physical constraints, having reached the boundary of its approved mine footprint after more than a decade of production.

“The project's State Agreement mandates that the project proposals required to increase Sino Iron’s operating footprint must be submitted by Clive Palmer-controlled Mineralogy,” the company’s statement reads.

“Mineralogy has refused to cooperate in the submission of critical life-of-mine proposals for many years.

“Given the urgency of the situation, the CITIC entities have launched a new legal proceeding in the Supreme Court of Western Australia, seeking orders to compel Mineralogy to submit the interim proposals to the state for approval.”

The legal proceedings unfolded amid the release of Mineralogy’s latest financial report this morning, revealing the company generated $126.1 million in profit for the year ending June 30, 2023.

The result is more than halved from the net profit of $276.6 million reported in 2022.

Mineralogy’s royalties came in at $446.7 million for 2023, down from $520.6 million in the prior year due to its net profit halving.

Mr Palmer pocketed $111.6 million from dividends paid out over three dates from August through to September in 2022. That comes after he notched $700 million in the prior period.

Aside from royalties, it generated incomes from “gain on disposal of commodities” being $3.8 million and other incomes of $3.6 million for the period.

Court proceedings

Speaking to the court, Mr Hutley said Mineralogy had no reasonable grounds to refuse the proposals and it would be the opposite of good faith to not even consider them.

Mr Hutley said the parties’ obligation under the state agreement should trump Mineralogy’s defence.

“We submit that Mineralogy’s pleaded defence rests on propositions of contract constructions that is inconsistent with the superior case of law; [a] state agreement that is paramount to what can be called a suite of agreements that governs the relevant projects,” he said.

“The paramount obligation is the obligation in the state agreement that all parties agree with the state and each other that they will ensure the continuation of the project.

“We say that it’s utterly absurd that every time there is a breach of good faith, no matter how minor, that until it is resolved, we have to stop mining.”

CITIC also sought to strike out some parts of Mineralogy's defence.

Mr Hutley is also representing Hancock Prospecting in the lengthy and costly Supreme Court trial over royalties claimed by Wright Prospecting and DFD Rhodes.

He is Chris Ellison’s legal representative in the Mineral Resources boss’s ongoing legal dispute with the company’s former procurement manager Steven Pigozzo in the Federal Court.

Lawyers for Mineralogy are scheduled to make their submissions in court tomorrow.