Citic Pacific dispute with Clive Palmer forces big production cutback and job losses at Pilbara iron ore mine

Chinese miner Citic Pacific will drastically reduce output from its Pilbara flagship iron ore hub — with an unconfirmed number of jobs to be axed — and push on with further legal action against landholder Clive Palmer. Citic on Thursday said it would cut production from the Sino Iron mine — 100km south-west of Karratha — by one-third after running out of physical space to keep mining on tenements largely held by Mr Palmer’s company Mineralogy. Jobs are almost certain to be affected at the operation, which employs about 3000 people, as output is reduced from 21 million wet metric tonnes a year to 14wmt for 2024. Citic chair and chief executive Chen Zeng said the company was in a “troubling situation” and claimed it could not progress the approvals it needed to operate at full capacity. “Despite our company’s huge investment in a new industry for this State, we’re in a troubling situation where we cannot progress approvals to enable life-of-mine operations up to our current ore entitlements,” he said. “In the short-term, we will do everything possible to protect and retain our workforce. However, there will be adverse impacts on some contracting activities, project expenditure, revenue, royalty payments and short to medium-term project viability.” Mr Zeng said an “urgent” resolution was needed to avoid further reductions or suspension of the operation. Citic claimed Mr Palmer had “refused to cooperate” in submitting the life-of-mine proposals for years. After a series of delays, Citic shipped its first ore in 2013 and is one of the only mines in the State producing a high-grade magnetite concentrate, alongside Fortescue’s Iron Bridge operation. Low grade magnetite ore is mined and then refined at Sino before being exported to China. In tandem with the scale back, Citic says it has launched another round of legal action in the WA Supreme Court hoping it can force Mineralogy to submit the State approvals it claims to need to keep mining for an interim period. The fresh plight adds to an already lengthy list of legal disputes with Mineralogy over royalties and mining. The parties will head to court next week for a directions hearing. Mineralogy has been contacted for comment.