Despite the apparent slowdown of Australia's resource sector, mining giant CITIC Pacific expects full production of its $8-billion iron ore mine in Western Australia even if the project has been hit by delays.
Mining tycoon Clive Palmer said he expects the venture to produce 24 million tonnes a year of magnetite concentrate during its first two years of trial production, which CITIC advised would start in November.
Mr Palmer attributed the delay in the commencement date for the iron ore project being developed by Hong Kong-based CITIC Pacific to the long approval process in Australia which also boosted its cost.
Mr Palmer, who expects royalties of about $500 million a year from the project, pointed out that the original guidance is now moot because of the several changes in the dimensions of the project. The royalties would be based on the amount of iron ore mined from the project located near Karratha and the volume of magnetite concentrate export from the venture.
The mining billionaire also disclosed that he has not thrown in the towel in plans to develop a major coal project in the Galilee Basin in Queensland, which was awarded by the state government to Indian firm GVK. The latter got priority rights to develop 600 kilometres of transport solution that would link Galilee and the coast to facilitate export of the commodity.
Mr Palmer wrote to Queensland Deputy Premier Jeff Seeney to demand an explanation why his project was overlooked in favour of GVK and threatened to file a lawsuit with the state Supreme Court unless he receives a good explanation from the official.
He said the proposal remains economically viable despite the decline in thermal coal prices. His staff submitted to regulators last week a new environment impact study for the Galilee project even if is Swiss partner, commodity trader Vitol, has backed out.
Mr Palmer toured members of media to his nickel refinery in Townsville, the Sino Iron project in Pilbara and his new hotel on the Sunshine Coast by flying the journalists aboard his private plane.