Column: China’s commodity import trend driven by prices, not economy
China's imports of major commodities are often viewed through the prism of the performance of, and outlook for, the world's second-biggest economy.
Clive Palmer’s Chinese business partners have taken their dispute with the eccentric mining magnate to the Australian legal system, seeking an injunection from the WA Supreme Court to block his move to terminate a lucrative Pilbara mining lease.
The West Australian reports that tensions between Perth-based China-owned miner CITIC Pacific and the flamboyant mining tycoon have flared over royalties Palmer demands in relation to the mining of Sino Iron iron ore.
CITIC has paid over USD$400 million to Palmer, the owner of the underlying Sino Iron tenements, for the right to mine two billion tonnes of ore, yet Palmer is also demanding additional royalty payments worth as much as USD$500 million in relation to extraction and production.
Palmer believes the royalties are owed to him as part of a “standard right-to-mine agreement” under which a royalty is paid when the ore is “taken”, which in Palmer’s view means when the ore departs from Australian shores for overseas processing facilities.
The mining magnate is believed to be claiming royalties on around seven to 10mt of iron ore already shifted by CITIC, stating that although the money involved is not large he would like to set a precedent because “it’s a 30-year project and you don’t want to constantly have disagreements.”
CITIC’s filing with the Supreme Court is in relation to a separate notice issued by Palmer’s flagship company Mineralogy which “[purports] to terminate the mining right and site lease agreements.”
Image of Clive Palmer courtesy of SunriseOn7 via Youtube
