Citic may halt world's largest magnetite iron mine as it faces trouble Down Under
China’s biggest conglomerate claims its local partner’s ‘refusal to cooperate’ risks the project’s sustainability
Citic, China’s largest conglomerate, risks having to suspend production at its troubled US$10 billion iron ore project in Australia because of its partner’s “refusal to cooperate”, its chairman warned after the firm unveiled higher interim profit.
The problems faced by Citic – the earliest and largest Chinese investor in Australia according to chairman Chang Zhenming – highlight some of the challenges confronting mainland firms that heeded Beijing’s call to venture abroad to secure natural resources for the nation’s development a decade ago.
The Sino Iron project in Western Australia state, which suffered years of construction delays and budget overruns, has been at the centre of long-running legal disputes between Citic and Mineralogy, owned by Australian businessman Clive Palmer, over production royalty payments.
Mineralogy, which owns the mining tenement, has refused to get the necessary government approvals required for waste storage, Citic has claimed.
“Mineralogy’s refusal to cooperate means we will run out of space for waste and tailings storage in the near future. This will severely constrain operations and impact Sino Iron’s sustainability,” Chang told reporters on Tuesday.
“In the worst case, we will need to stop operating which is what none of us wants to see. The risk is real.”
