ABC News reported that Clive Palmer’s Mineralogy has won a claim with Australia’s Supreme Court for $149.4 million in unpaid royalties against two Citic Pacific subsidiaries over a Pilbara iron ore project. Justice Kenneth Martin ruled Mineralogy’s claim for unpaid royalties against Sino Iron and Korean Steel had been established. He also found the claims against Citic, as guarantor for Sino and Korean debts, remained to be determined.
Citic paid Palmer $415 million in 2006 as part of a takeover agreement for the Sino Iron ore project, which also included paying two different forms of royalties to Mineralogy. Citic has refused to pay the second royalty, known as Royalty B, prompting the company to make the claim.
Citic argued the royalty payment was linked to the then fixed benchmark pricing system for iron ore, but that was abandoned for the current spot price system in 2010 and so it should not have to pay the royalty.
Mineralogy countered, saying the agreement with Citic made no mention of the benchmark system and a royalty sum could still be calculated from the different spot prices over the years.