PERTH (miningweekly.com) – Unlisted mineral resource developer Mineralogy has taken further steps to evacuate China’s Citic from its properties.
On Wednesday, Mineralogy confirmed that it had issued Citic with a termination notice over the Mineralogy leases and port, which allows Citic to export iron concentrate from the Sino iron-ore project, in Western Australia, to China.
Mineralogy has given Citic 90 days in which to remedy defaults, or to suffer the termination of their rights over the port.
Last month, Mineralogy served Citic a notice which gave the Chinese company 21 days to terminate the mining rights over the Sino project. This followed the Chinese government's decision to launched legal proceedings against the company’s former chairperson and five former directors for failing to disclose information.
The Western Australian Supreme Court had, however, issued an interim injunction preventing Mineralogy from acting on this termination notice until a hearing was held on December 18, at which a trail date would be set.
Mineralogy said on Wednesday that as a State-owned company, Citic and its board had a responsibility to act in accordance with the law, adding that the lack of transparency was of major concern to Mineralogy as a shareholder of Citic.
“Mineralogy is of the view that the Hong Kong Stock Exchange and authorities should immediately commence an investigation into the failures of Citic to advise the market of the port termination notice and the risks that such notice places on the company’s operations in accordance with the law and rules of the Hong Kong Stock Exchange,” the company said in a statement.
Mineralogy leased the Sino iron mine site to Citic Pacific, which acquired the right to mine two-billion tonnes of magnetite ore in the Pilbara from Mineralogy, between 2006 and 2008. During 2012, the company exercised its option to acquire the right for another one-billion tonnes.
However, in 2012, Citic Pacific received notices from Mineralogy alleging that terms in the mining right and site lease agreement had been breached, with Mineralogy maintaining that it was entitled to a royalty payment of 3c/t of all materials taken from the mine area, including waste material.
Mineralogy on Wednesday claimed that Citic continued to suffer major loses from the Sino project, and urged stakeholders to question how the project had been delayed and had cost more than $10-billion, as opposed to the planned $1.5-billion.
"Such tactics from Mineralogy to try and interrupt our operations are nothing new. We will continue to protect the interests of the project as necessary,” a Citic spokesperson told Mining Weekly Online.