Court dismisses Mineralogy’s appeal

Western Australia’s highest court has dismissed an appeal by Mineralogy in one of the many lawsuits between the Clive Palmer-owned mining company and CITIC Limited's subsidiary Sino Iron.

Mineralogy alleged CITIC subsidiaries Sino Iron and Korean Steel were required to pay $530 million into a fund relating to remediation works on a magnetite iron ore mine at Cape Preston, under an agreement the parties signed in 2006.

Supreme Court of Western Australia Justice Kenneth Martin dismissed Mineralogy’s action last year, a decision that was upheld by the WA Court of Appeal today.

Justices Michael Buss, Andrew Beech and John Vaughan handed down their judgment this afternoon, again dismissing Mineralogy’s claims.

“This appeal concerns another of the very numerous disputes between the parties to this appeal arising from and concerning two iron ore mining agreements made between them,” the judgment said.

The WA Supreme Court has heard more than 30 legal actions between Mineralogy and CITIC, or its subsidiaries, since 2013.

The Court of Appeal judgment said Mineralogy by Mr Palmer sent a letter to CITIC Pacific Mining, demanding Sino Iron and Korean Steel pay about $530 million into the site remediation fund, in April 2018.

"Mineralogy said that that amount corresponded to an estimate by a relevant expert of the then present-day cost to remediate the then existing disturbance of the mine sites," it said.

Mineralogy alleged CITIC and the subsidiaries breached their obligations under an agreement the parties signed, that included a clause about a site remediation fund.

In their defence, CITIC and the subsidiaries claimed Mineralogy’s notice was invalid.

Mineralogy then issued separate notices to Sino and Korean in May 2018, demanding payment with each party contributing half of the $530 million, according to the judgment.

In his 2021 judgment, Justice Martin found Mineralogy failed to establish a designated trust account and that its notices to CITIC and the subsidiary companies were not valid notices.

The WA Court of Appeal Justices upheld the findings, saying Mineralogy's own interpretation of the clause in its agreement was inconsistent.

The Justices also found the respondents had no obligation to contribute to a site remediation fund in absence of a separate account specifically created for it.

CITIC Pacific Mining is based in Perth and is a wholly-owned subsidiary of Hong Kong-listed CITIC Limited.