Clive Palmer's company Mineralogy has moved to terminate its partnership with the Chinese operator of its $10 billion iron ore mine in Western Australia.
Mineralogy has given Chinese state-owned Citic Pacific notice that its right to mine iron ore at the Sino Iron Project in Western Australia will be terminated in 21 days.
Mineralogy director Clive Mensink, Mr Palmer's nephew, said the company had served a default notice on Citic Pacific over billions of dollars in losses more than two years ago, but the issues raised had not been addressed.
"Not only has Citic Pacific Limited failed to rectify the defaults in the notice, the directors of Citic Pacific failed to declare the default notice to the market in Hong Kong and may have breached the law," Mr Mensink said.
He said Mineralogy was considering making a complaint to Hong Kong authorities about the alleged failure of Citic Pacific directors to inform the Hong Kong stock exchange of the 2012 default notice.
"The Sino Iron Project has a capital cost of more than $8 billion and the failure of the directors to inform the market could be a criminal offence," Mr Mensink said.
Mr Palmer's Mineralogy has been embroiled in a series of Australian legal battles with Citic Pacific over the Sino Iron project in WA's Pilbara.
One is being played out in the Western Australian Supreme Court and surrounds iron ore royalty payments that Mineralogy claims it is owed by Citic Pacific.
Citic Pacific has launched a separate matter in the Queensland Supreme Court, alleging Mr Palmer misused funds set aside for port operations on his election campaign.
Mr Palmer's relationship with the Chinese company further soured when he called the country's government "bastards" and "mongrels" that "shoot their own people".
The federal MP, whose Palmer United Party wields crucial balance-of-power votes in the Senate, was responding to questions on the ABC's Q&A program about the legal battle. He later apologised for the comments.
His comments were widely condemned, including by Prime Minister Tony Abbott.
Source: Sydney Morning Herald
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