Upgrade to Sino shelved
An upgrade of the giant Sino Iron project in the Pilbara has been shelved by Chinese owner CITIC because of the ongoing legal feud with Clive Palmer.
In March, Mr Palmer dismissed suggestions CITIC could walk away from Sino Iron as “scare tactics”, saying the rest of its Australian businesses could be on the hook if it quit the project under guarantees provided to his privately owned resource company, Mineralogy, by its Chinese parent. But last week Sino Iron boss Chen Zeng told workers the company’s board had deferred new capital spending at the project, designed to extend its life and help ramp production up to its nameplate 24 million-tonne-a-year run-rate, needed to make the project financially viable.
CITIC will defer a decision on the acquisition of new mining fleet, and capital works at the processing plant designed to improve the grade and quality of the magnetite concentrate produced at the Pilbara magnetite mine.
Critically, a decision to build new tailings storage facilities has also been deferred in the face of what CITIC says is an ongoing refusal by Mineralogy to sign off on applications to the State Government for the expansion — a requirement under the project’s State Agreement.
Without the approval, CITIC will have nowhere to store the vast quantities of waste rock produced by the low-grade mining operation.
Its lawyers told the Supreme Court in January State Government approval was needed for the expanded stockpiles and waste storage facilities by the middle of the year, or Sino Iron would grind to a halt.
“After thorough consideration, the board of directors has decided it simply cannot recommend such a major investment until the immediate threats to the continuation of our operations have been addressed, ” Mr Zeng told staff.
“Some of Mineralogy’s claims threaten our ability to continue operations, others affect the economic viability of the project.
“Resolution requires the cooperation of all parties, including the State of WA.”
A concentrator at CITIC's Sino Iron magnetite project.