PERTH (miningweekly.com) – Mining personality Clive Palmer and his company Mineralogy have filed an application with the Federal Court to have Sino Iron placed into liquidation for nonpayments of funds.

Sino Iron is a subsidiary of Chinese major Citic Pacific, and is developing the multibillion-dollar Sino iron-ore project.

Mineralogy have leased the mine site to Citic Pacific, which acquired the right to mine two-billion tonnes of magnetite ore in the Pilbara from Mineralogy, between 2006 and 2008. During 2012, the company exercised its option to acquire the right for another one-billion tons.

However, in 2012, Citic Pacific received notices from Mineralogy alleging that terms in the mining right and site lease agreement had been breached, with Mineralogy maintaining that it was entitled to a royalty payment of 3c/t of all material taken from the mine area, including waste material.

Citic Pacific this week lost a bid to stop Mineralogy from operating a port in Western Australia, after the Chinese miner filed a lawsuit against a government decision that designated Mineralogy as the operator of the Port of Cape Preston.

Federal Court Justice Steven Rares noted that the Chinese firm did not have a right to veto, or urge against, the designation of a person as a port operator merely because those parties had a dispute or were, or one was, not prepared to cooperate with the other.

The ruling would not affect Citic Pacific’s operations in the region.

Mineralogy has now turned to the Federal Court, expressing its concern that Sino Iron was unable to pay its debts when they fell due, considering payments under normal arrangements were more than three months in arrears.

“Even though Sino Iron is in billions of dollars in debt, it may well be that its parent company Citic Pacific won’t advance it any funds. The fact that Sino has changed normal payment patterns is a matter of great concern,” the miner said.

Palmer on Friday said that he had been struggling for the past two years to gain access to the chairperson and president of Citic Pacific to seek a "resolution in a friendly and cooperative forum for the long-term benefit of Australia and China".

“At no time would the chairman or the president of Citic Pacific agree to meet with me,” Palmer said.

He added that Mineralogy had put at least ten proposals to Citic Pacific over the last two years to get a resolution, and each time the Chinese firm had failed to put any proposal to Mineralogy.

“Citic Pacific’s behaviour is disgraceful and dishonourable. Citic Pacific is trying to have the Australian government overruling our judicial system. I feel compelled to warn all Australian companies to be careful when using a foreign partner. This doesn’t mean that all Chinese companies act in this manner. It just means Citic Pacific is trying to corrupt our system,” Palmer said.

Citic Pacific president Zhang Jijing was reported as saying that claims the company had not paid its share were “plain rubbish”.