Watpac seeks $53m from BC Iron

The legal battle between BC Iron and Watpac Civil & Mining has intensified with the mining services company serving a counterclaim to the iron ore miner and its joint venture partner, now seeking about $52.8 million.

BC Iron and its 25 per cent joint venture partner at the Nullagine iron ore project, Fortescue Metals Group, commenced legal proceedings against Watpac in December seeking damage recovery after alleging the company failed to fulfil its contractual obligations when it worked at the project.

At the same time, Watpac was seeking about $12.5 million from BC Iron in relation to a one-off $2 million payment as a result of its early contract termination, coupled with BC Iron’s requirement to purchase $6.4 million worth of plant and equipment.

However, today BC Iron said in a statement that it had received a counterclaim from Watpac last week, with the contractor now seeking up to $52.8 million.

“A significant portion of the counterclaim is for amounts which were not invoiced or claimed by Watpac until after the contract had been terminated,” the iron ore miner said.

“This portion relates to retrospective claims for additional amounts or adjustments previously invoiced by Watpac and paid by BC Iron during the course of its mining services contract with Watpac.”

BC Iron said in some cases, the claims were in relation to work conducted by Watpac in months as far back as June 2011.

“BC Iron disputes the claims made by Watpac in its defence against the proceedings commenced by BC Iron and Watpac’s counterclaim,” it said.

“BC Iron will strongly defend these in addition to continuing to pursue Watpac for beaches of its contractual obligations.”

Watpac Civil & Mining is a subsidiary of Queensland-based Watpac Limited.

The mining services company was scheduled to wrap up work at Nullagine in October last year, however BC Iron terminated the contract three months early.

Operations at Nullagine have since been suspended as a result of the depressed iron ore market.

Watpac revealed last week the financial impact of its dispute with BC Iron and declining work at Pluton Resources’ Cockatoo Island project, including $41.7 million worth of write-downs.

BC Iron shares were 7.1 per cent lower to 13 cents each at 11am.