PERTH (miningweekly.com) – Iron-ore junior Pluton Resources is battling receivership after junior Chinese creditor Rizhao Port Group appointed receivers and managers, prompting fellow-listed Watpac to suspend an existing mining services contract at the Cockatoo Island project.

Pluto told shareholders on Monday that the receivers and its solicitors had refused the company’s requests for details of the appointment.

The junior miner pointed out that the actions by the receivers contravened specific provisions of the Priority and Subordination Deed which did not permit such appointments without the consent of the first ranking security holder, which in this case was General Nice Resources Commercial Offshore De Macaw Limitada (GNR), which had not been provided.

As such, Pluton has ordered its employees and suppliers not to provide the receivers with any information.

Pluton noted that initial discussions with Rizhao regarding refinancing of amounts owed to the Chinese firms had confirmed that Pluton joint venture (JV) partner Wise Energy Group had prompted Rizhao’s actions.

At the end of October, Wise tried to remove Pluton as the manager of the Cockatoo Island project. It is believed that the dispute with Wise emerged around project costs at Cockatoo Island, with Pluton claiming that its JV partner owed outstanding payments.

Pluton, meanwhile, was in discussions with GNR, which has advised the company that it would seek the removal of Rizhao’s receivers, and would work cooperatively with Pluton management to ensure that interruptions to the operation were minimised and that the company proceeded to refinance the Rizhao debt as soon as practical.

Watpac on Monday stated that it expected to meet with Pluton’s receivers early this week, after which the company would assess the status of the contract and whether to resume mining services at Cockatoo Island.

The mining contract would be worth between A$50-million and A$60-million in revenues to Westpac for the year ended June 2015, and the contractor has warned that if mining services were not resumed, it could adversely affect the company’s own net profits for the 2015 financial year.