Clive Palmer claims CITIC Pacific failed its | Australian Markets

Royalties billionaire Clive Palmer has begun his struggle guilty iron ore miner CITIC Pacific for his alleged $1 billion collapse of mineral processing play Queensland Nickel.

Mr Palmer is making an attempt to pin the Yabulu refinery’s everlasting closure on delays within the cost of royalties from the Cape Preston iron ore operation, 90km south-west of Karratha.

Mr Palmer has develop into a billionaire because of a whole bunch of thousands and thousands of {dollars} in big-ticket royalties paid by CITIC subsidiaries because it kicked off its $20 billion magnetite iron ore mining, processing and export operations early final decade.

He blames Queensland Nickel’s January 2016 collapse on delays in CITIC’s alleged failure to pay his flagship Mineralogy a second class of royalties totalling more than $200 million from 2013 to late 2017.

Starting a WA Supreme Court listening to on Monday, Mr Palmer’s barrister Peter Dunning mentioned CITIC’s failure to pay so-called class B royalties had created a real risk for Queensland Nickel and Mineralogy.

Contrary to claims by CITC that it didn’t should pay the second class of royalties pending a judgment handed down in November 2017, Mr Dunning mentioned the Hong Kong-listed group had breached a deal signed a decade earlier.

“The breach is a matter of record in this court,” Mr Dunning mentioned, kicking off a fortnight of hearings. “It had a flow-on effect to other companies in the Palmer group. Mineralogy was particularly vulnerable to CITIC’s non-performance.”

Mr Palmer’s Yabulu nickel refinery has been closed because it fell into administration after which liquidation in early 2016. A Federal-funded particular purposed liquidator was additionally appointed to guard employees claims of up to $80m.

CITIC and Mr Palmer’s pursuits have additionally been locked in an countless array of legal battles over royalties and the extension of the magnetite iron ore mining, processing and delivery operations on Pilbara land held by Mineralogy below a State Agreement.

Mr Palmer gained a WA Supreme Court judgment in November 2017 ruling he ought to get class B royalties that took under consideration iron ore grade and prevailing costs. The unique offers between CITIC and Mineralogy had nominated a benchmark iron ore price that was scrapped in 2010..

The billionaire claims he would have been capable of save Queensland Nickel in late 2015 if CITIC had paid the class B royalties funds to Mineralogy on time.

CITIC is combating Mr Palmer’s makes an attempt guilty the collapse on the alleged delays in royalty funds, arguing that legal arguments in regards to the second-tier royalty cost had been extraordinarily advanced.

But Mr Dunning mentioned there was no foundation for CITIC delaying the cost of the class B royalties. In doing so, it was breaching its obligations below agreements with Mineralogy from the late 2000s.

“The CITIC parties were getting that benefit but not paying for that benefit to Mineralogy,” he mentioned.

The first stage of the case is set to run for a fortnight, however the argument over the post-collapse worth of Yabulu could also be heard in August.

Justice Michael Lundberg final week rejected an professional report from BDO commissioned by Mr Palmer that estimated the worth vary for the Yabulu refinery of zero to $227m straight after Queensland Nickel collapsed in January 2016.

But after legal arm wrestles, Justice Michael Lundberg ruled on Friday Mr Palmer might call for proof from an accountant who filed an professional report that was used towards the Mineralogy boss in a 2017 legal motion.

The Palmer and CITIC legal groups have agreed to rent former Supreme Court grasp Craig Sanderson to help with figuring out the best way ahead based mostly on the restricted use of the 2017 valuation.