Supreme Court weighs in on Sino royalty dispute
PERTH (miningweekly.com) – The Supreme Court of Western Australian has sided with iron-ore hopeful Citic Pacific in a royalty disagreement with Mineralogy over the Sino iron-ore project.
Citic Pacific had previously acquired the right to mine some 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 tons.
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 material taken from the mine area, including waste material.
Mineralogy issued a $35-million invoice for this waste royalty, based on an estimated 100-million tonnes of waste being removed from the mine site.
However, the Supreme Court has now ruled that the royalty was not payable on the waste material.
“Citic Pacific has always accepted that the royalty was payable on magnetite ore taken, the decision has simply determined the point in time when “taking” of the ore occurs,” the company said.
It noted that operationally, the decision would require that procedures be put in place to ensure that the royalty was paid only once, when magnetite ore passed from the stockpile to the primary crusher.
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