31/05/2021 - 15:32

Palmer loses fight to halt Sino Iron legal proceedings

31/05/2021 - 15:32

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The Supreme Court has thwarted an attempt by Clive Palmer’s mining company, Mineralogy, to halt a long-running court action with Sino Iron over a proposed mine expansion.

Palmer loses fight to halt Sino Iron legal proceedings
The Supreme Court has thwarted an attempt by Clive Palmer’s mining company Mineralogy to halt a long-running court action with Sino Iron over a proposed expansion of the Pilbara-based project.

The Supreme Court has thwarted an attempt by Clive Palmer’s mining company, Mineralogy, to halt a long-running court action with Sino Iron over a proposed expansion of the Pilbara-based project, preventing the mining magnate from opening up another front in the ongoing battle.

Mineralogy subleased its mining tenements over the Balmoral Project to CITIC Limited subsidiaries Sino Iron and Korean Steel two decades ago, with both companies signing mining rights and site lease agreements.

During the past 10 years, however, Mineralogy has been involved in multiple cases to retrieve royalty payments and over alleged breaches of those agreements, which included a long-running Supreme Court case against Sino and Korean Steel over $149 million in royalties.

In 2017, CITIC Limited, Sino Iron and Korean Steel took Mineralogy and Mr Palmer to the Federal Court in a bid to force its hand in the approval and submission of proposals critical to the operation of Sino Iron’s magnetite project.

CITIC had proposed to expand the mine pit within the Sino Iron leases, to increase tailings and waste capacity, to increase the capacity of existing stockpiles and port infrastructure, and to construct new infrastructure corridors.

CITIC prepared documents setting out the proposed activities, but CITIC claims Mineralogy has withheld its approval for the mine continuation and declined to join with CITIC subsidiaries in submitting the plans to the state government.

Mineralogy has denied that the correspondence it had received constituted a ‘request’.

In a judgment released on Friday, Supreme Court Justice Peter Quinlan revealed the CITIC parties had argued that Mineralogy’s failure to cooperate constituted both a breach of its contractual obligations and unconscionable conduct under Australian Consumer Law. They sought relief in the form of a court order that would force Mineralogy to comply with the request.

Mineralogy applied to permanently halt the action on the grounds that it was brought about for “improper purposes” and was an abuse of process, alleging that CITIC was using the proceedings to pressure it into agreeing to contract variations.

The CITIC parties sought a court order that the application be struck out or dismissed.

Justice Quinlan found that there was no arguable basis to contend that the proceedings should be stayed as an abuse of process, dismissing the application.

“In the absence of an arguable basis for contending that the substantive proceedings are an abuse, it is not, in my assessment, in the interests of justice that the proceedings be further delayed, or the court's resources be further devoted, to that contention,” Justice Quinlan said.

He said opening up another front in the ongoing battle between the parties would likely result in a drawn-out interlocutory process that would not resolve the substantive dispute.

Justice Quinlan said Mineralogy had not demonstrated there was a reasonably arguable case for the court to stay the substantive proceedings, and that the proceedings should not be further delayed by, or the court's resources devoted to, the application.

A CITIC spokesperson told Business News the company welcomed the dismissal.

“It’s our view that it was a baseless distraction which only served to delay consideration of very important matters related to life-of-mine operations at Sino Iron,” the spokesperson said.

“Timely approval of the mine continuation proposals remains critical to secure the future of this project, local jobs and a new iron ore downstream processing industry for WA.”

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