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williak

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03/01/17

10:26

Post #: 21646328
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Originally posted by abbasurvey ↑

China’s CITIC has suffered a significant setback in its ongoing brawl with Clive Palmer over payment of royalties at the giant Sino Iron magnetite project in the Pilbara, with the Supreme Court today ordering the company to pay $US21.4 million on an interim basis in the royalty dispute.
Half of that money will go to Mr Palmer’s privately owned resource company, Mineralogy, with the rest to be held by the court.
Today’s judgment, by Justice Kenneth Martin, is not the end of the running stoush, but is a significant victory for Mr Palmer, who has argued CITIC should be paying export royalties on magnetite concentrate shipped from Sino Iron irrespective of a running dispute about how the royalty should be calculated.
The dispute over royalty payments on magnetite produced at Sino Iron has been raging for the last three years. The 2006 contract under which CITIC bought into the project stated the production royalty would be based on the then-prevailing benchmark iron ore price.
The industry has since abandoned the annual pricing system in favour of a more transparent formula incorporating a spot price, leaving the two companies unable to come to agreement on a new calculation.
While the substantive dispute over royalty calculations is still to be heard by the Supreme Court, Justice Martin’s decision hands Mr Palmer at least a short-term cash injection.
Mr Palmer sought a payment of $US48 million on an interim basis late last year, as his Queensland nickel refinery teetered on the brink of insolvency - it collapsed into administration on January 18. The Supreme Court initially rejected the argument, but that decision was overturned by the Court of Appeal in June.

Justice Martin said in his decision today the court would hold half of the award in trust to address “legitimate concerns of the CITIC parties concerning possible later recoupment, were that necessary post trial from Mineralogy”.
But his decision said that Mineralogy had advanced a strong prima facie case it should be receiving quarterly payments from royalties on product shipped from Sino Iron, and that CITIC’s failure to make any payments ahead of a final judgment on the eventual trial was at least partly to blame for Mineralogy’s financial troubles.
Today’s judgment concerns royalties allegedly due for payment before October 2014, when Mineralogy first advanced the legal argument that CITIC had repudiated its agreements and should be thrown off the project.
The matter will return to court.

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