Lai SeeMagnetic attraction: Citic Pacific and Clive Palmer

Clive Palmer's relations with his mainland business partner Hong Kong-listed Citic Pacific continue their downward spiral.

Citic Pacific recently denied claims by the mining billionaire that it was paying him A$500 million (HK$3.5 billion) a year. The supposed payments were in respect of royalties in connection with Citic's ill-fated Sino Iron project in Western Australia.

In 2006, Palmer sold Citic the rights to mine magnetite iron ore in return for royalty payments. Citic agreed to build the infrastructure, but the "deal of the century", as analysts call it, because it heavily favours Palmer, has taken a heavy toll on Citic. The original budget of US$2.5 billion has soared to US$8 billion and could reach US$10 billion. That is not counting the bungled US$2 billion attempt at hedging the company's Australian dollar risk that cost chairman Larry Yung Chi-kin his job.

Citic recently lost a dispute over royalty payments to Palmer. A Citic spokesman told BRW magazine: "Matters relating to royalties for Sino Iron are currently before the Australian courts, where we believe these issues will be dealt with fairly."

There are three other court cases between these two parties relating to Sino Iron. The project is three years behind schedule and the date for the first shipment has repeatedly been delayed. The latest hitch has seen it delayed from the end of May until some time in the second half of the year. But don't hold your breath.