Published On: Tue, Oct 15th, 2019

McGowan and Johnston Battle Palmer Over Pilbara Tenement State Agreement

An iron ore mining project has become a battleground for once-aspiring Australian politician and mining magnate Clive Palmer and Western Australia’s top policy makers. The Sino Iron Ore Mine, 30km from Cape Preston and 90km from Karratha, is, as it seems, both a blessing and a curse for the disgraced mogul;

The project should be Mr Palmer’s darling; Clive Palmer’s Mineralogy makes $1m a day in royalties paid to him by mine operator CITIC. This is because Mr Palmer holds the underlying mining tenements for the land CITIC is operating the mine on and has been receiving a quarterly payment of about $100 million from CITIC since 2014.

But in the past year, after years of legal stoushes between Mr Palmer and CITIC, things have turned sour quickly for the self-proclaimed ‘meme-king’. 

It all starts with, well, a dump. As The Guardian reported; “extracting iron ore from magnetite is a dirty process that generates three tonnes of waste for every tonne of ore – and CITIC’s dump is full. The company needs WA government approval for more room to mine, store waste and to expand its tailings dam.”

The problem is that Mr Palmer has repeatedly refused to allow CITIC to use more land on his tenement and has ultimately asked for $750m in exchange for his sign-off. Industry insiders, as well as leading WA politicians like Premier Mark McGowan and Mines and Energy Minister Bill Johnston, believe this demand by Clive Palmer is unreasonable and was solely meant to stall and further antagonize the Chinese conglomerate.

McGowan and Johnston are concerned with developments at Sino Iron because the Iron Ore project employs close to 3,000 Australians. This is why in November 2018, WA Premier Mark McGowan and the WA government urged Mr Palmer to sign off on the expansion application. “We urge Mr Palmer to resolve the issue of waste disposal immediately,” a spokesman for McGowan said.

Mr Palmer was quick to respond; he took to newspaper ads, YouTube videos, Facebook posts and press releases to both attack McGowan and blame CITIC, a Chinese company, of “putting Australia’s ports at a risk of invasion”. This claim was immediately refuted, making Palmer a laughing stock.

The feud quickly escalated, and in May 2019 the WA government announced it was considering interfering and altering the state agreement, a legislative step of extreme importance, as state agreements are usually binding. Companies need to know these contracts would survive political turmoil and upheaval, or they would take their business elsewhere, somewhere they consider more stable. 

However, the ongoing attempts by McGowan and Johnston to alter the agreement attest to the significance of the Sino Iron project. The Premier and the Minister of Mines and Petroleum, Commerce and Industrial Relations are deeply concerned with the future of the thousands of jobs the project brings to the area. 

“His (i.e. Clive Palmer’s) ads are highly misleading and he is a threat to jobs, in particular mining jobs in Western Australia,” McGowan said in a press conference. “There are 3000 West Australian families whose livelihoods he is directly threatening.”

“The State Government is continuing to explore our legal options regarding Clive Palmer’s threat to the more than 3,000 West Australians who work on the Sino Iron project,” Mr McGowan told State Parliament. “He milks more than a million dollars a day from the Chinese investors and then attacks Chinese investment. He is a greedy hypocrite running a disgraceful attack on our biggest trading partner”, he added. 

Just recently, Businessnewsonline reported that McGowan, Johnston and Alannah MacTiernan, Minister for State Development, Jobs and Trade, are still discussing different ways to intervene to force Mr Palmer to give CITIC the land they desperately require. Altering the state agreement is one of them. 

Sources say the WA government is “deeply troubled” with Mr Palmer’s behaviour, especially after similar situations brought unemployment to Townsville and to the Gold Coast in Queensland, after two other Palmer-owned and run projects collapsed in recent years.

This is not a great time to be hampering iron ore mines. Iron ore prices plummeted 20% in August 2019, putting Sino Iron in a heightened risk. With the drop in the commodity’s price, steep royalties and operational risks in regard to the tailings dam, CITIC needs a lifeline quick, or 3,000 people might find themselves on the streets.

Premier McGowan, who faced countless attacks by Clive Palmer, responded fiercely to the media blitz the billionaire bankrolled and has made his position regarding Sino Iron clear time and again. McGowan blames Palmer for the Sino Iron debacle and intends to continue pressuring him to reach a solution.

Bill Johnston is also considered a hardliner, fighting for WA miners and workers despite potential controversy, and has already proven quite capable of dealing with Mr Palmer; in August 2019 he kicked Clive Palmer off a Pilbara tenement for squatting after the businessman failed to uphold his tenant lease for several years in a row. Lease conditions force tenants to invest at least $50,000 a year on exploration and development, which Mr Palmer clearly hasn’t done.

Sources claim Minister Johnston refused to meet with Mr Palmer prior to announcing the decision. Now McGowan, Johnston and MacTiernan must complete what they started and solve the Sino Iron crisis. Clive Palmer hasn’t resolved the situation until now and it is unlikely he will unless forced to. 

Author Bio:
James North is a young entrepreneur, who has accomplished a great feat in the world of marketing and advertising. He is the husband of a accomplish writer, and the father of two young adults. He has been contributing to digital platform for quite some time now. He loves to share his innovative ideas and thoughts so that readers could be benefited. He loves playing cricket at his leisure time.
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