The $12.73bn Sino iron project supplies magnetite iron ore concentrate to China. Credit: Rob Lavinsky, iRocks.com – CC-BY-SA-3.0.

Clive Palmer’s Mineralogy and Chinese state-owned CITIC have filed legal petitions against each other over their A$18bn ($12.73bn) Sino joint venture iron project in Western Australia.

Mineralogy contests that CITIC should have invested at least A$500m ($353.71m) into environmental rehabilitation funds for the project. The Australian firm owns the land on which the project is located.

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Palmer was quoted by Australian Associated Press (AAP) as saying: “For 12 years, they’ve been refusing to put any money into it.

“So the people of Western Australia have got no protection against the environmental damage that they’ve done at Cape Preston. Now we’ve got to go to court to enforce that.”

The petition comes days after CITIC and its subsidiaries Sino Iron and Korean Steel began legal proceedings in the Australian Federal Court to force Mineralogy to join them in submitting proposals to the state government.

The proposals include seeking approvals for additional land, including for waste rock and tailings storage facility expansions.

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CITIC stated that additional approvals are necessary at this stage to proceed with mining and processing operations at a project expected to be in operation for more than 30 years.

The company claimed that Mineralogy did not give its approval for the mine continuation proposals.

“The ultimate effect will be a substantial reduction in the scope of operations of the project.”

CITIC Pacific Mining CEO Chen Zeng said: “It’s our firm view that Mineralogy’s ongoing failure and refusal to submit the proposals and take the other steps requested of it has caused, is causing and will continue to cause loss and damage to CITIC subsidiaries.

“Initially this has led to significant increased costs in planning, developing and operating the project. The ultimate effect will be a substantial reduction in the scope of operations of the project. It may result in the suspension of those operations.”

The project offers direct and indirect employment to nearly 3000 workers and exports high-grade magnetite iron ore concentrate to China.

The legal battle comes after the Australian company won a court case against CITIC over royalty payments from the project.