27/05/2021 - 14:23

Palmer sues Sino, Korean Steel for $27.3m

27/05/2021 - 14:23

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Clive Palmer’s mining company Mineralogy is suing Sino Iron and Korean Steel over an alleged $27.3 million debt stemming from a 15-year-old mining lease agreement.

Palmer sues Sino, Korean Steel for $27.3m
According to a writ lodged with the Supreme Court of WA, Mineralogy's claims relates to a 2006 Mining Right and Site Lease Agreements with Sino Iron and Korean Steel.

Clive Palmer’s mining company Mineralogy is suing Chinese company CITIC Limited and its subsidiaries Sino Iron and Korean Steel over an alleged $27.3 million debt stemming from a 15-year-old mining lease agreement.

Mineralogy subleased its mining tenements over the Balmoral Project in the Pilbara to Sino Iron and Korean Steel in 2001, with both companies signing agreements to extract about 1 billion tonnes of magnetite ore from the Balmoral Project.

Over the past decade, Mineralogy has been involved in multiple cases over royalty payments related to the project, which included a long-running Supreme Court case against Sino and Korean Steel to retrieve $149 million in royalties.

According to a writ lodged with the Supreme Court of WA this week, Mineralogy claims it also entered into mining right and site lease agreements with Sino Iron and Korean Steel on March 21, 2006.

The agreement allegedly stipulated that the two companies were to pay all of Mineralogy’s costs in administering the agreement.

In October 2008, the four parties executed a deed entitled the Forescue Coordination Deed, which sought a guarantee from CITIC that it would indemnify Clive Palmer and Mineralogy against any loss suffered, paid or incurred in relation to the failure of Sino Iron or Korean Steel to perform its obligations.

As a result of administering the agreements, Mineralogy claims it has incurred costs of more than $27.3 million, $19 million of which have been spent on legal costs following 34 legal proceedings involving some or all of the parties pertaining to the agreements between 2013 and 2020.

In the writ, Mineralogy argued that it had the right to recoup those costs given they were incurred as part of the administration of the agreement. 

On February 12, 2021, Mineralogy wrote to Sino Iron, Korean Steel and CITIC Limited outlining the costs incurred in administering the agreement and demanding that both Sino and Korean pay $13.6 million into the plaintiff’s bank account within 14 days. 

However, Mineralogy claimed the two companies failed to comply with the demand. 

A second written demand notice was sent on March 8, before a third and final notice was issued to CITIC on April 12, demanding payment within seven days.

Again, the parties allegedly failed to comply with the demand. 

According to the writ, Mineralogy claims that failure constituted a breach of Sino Iron and Korean Steel’s obligations and that it was entitled to damages in the sum of $27.3 million.

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