RESOURCES billionaire Clive Palmer has won a multimillion dollar court battle over a single word in a contract which defined the timing of royalty payments due from an $8 billion iron ore mine.
In a West Australian Supreme Court ruling, Justice James Edelman found in favour of Mr Palmer’s Mineralogy.
It was battling with contractors Sino Iron and Korean Steel over when royalties from iron ore at the Cape Preston magnetite ore grounds, south of Dampier, were due.
Justice Edelman said that argument boiled down to the definition of the word “taken”, and when that meant the Citic Pacific companies were liable to pay.
Mr Palmer’s lawyers argued the ore was “taken” when it came into Sino Iron or Korean Steel’s possession or control by being “moved from its natural place of occurrence”.
But Sino Iron and Korean Steel said they should only have to pay when it was received by them at their delivery point, being the primary processing stage.
After what Justice Edelman described as “meticulous submissions” from both sides, he sided with Mineralogy, meaning about $400,000 of royalty payments dating back to 2008 were now due.
“The nature of the declaratory orders sought by Mineralogy raised the spectre of $7 billion depending upon the meaning of one ambiguous word in a contractual provision,” Justice Edelman wrote.
“Although the word ‘taken’ is ambiguous, the best interpretation of that word, and the clause, is a construction similar to that proposed by Mineralogy.”
Mr Palmer said the ruling was significant.
“The judgment clearly spelt out that Mineralogy is entitled to royalties from Citic over the life of the project, worth hundreds of millions of dollars,” Mr Palmer said.
“It sends a clear message to foreign companies operating in Australia that contracts made under Australian law will be enforced by the courts.”
The mine, which could extract up to three billion tonnes of magnetite ore, will operate until 2045. – AAP