Clive Palmer’s company Mineralogy could lose its right to operate a new multi-billion dollar port in Western Australia amid concerns about the miner's ability to run the facility.
The Department of Infrastructure and Transport is reportedly moving to strip Mineralogy as operator of Cape Preston port near Karratha.
The port has been built to ship iron ore from a $7 billion mine being developed by the Chinese company CITIC Pacific, with Palmer’s company granted operations rights to the port in January.
However The Australian reports the West Australian government is pressing for the rights to be revoked amid concerns over the company’s credentials with insiders claiming Mineralogy should not have been granted legal permission to run the port.
The move against Palmer’s company as operator is a major blow as it stood to make millions of dollars through exports at the port.
Palmer and CITIC Pacific are battling in Perth’s Supreme Court over a royalties dispute on the iron ore project, which is yet to export after huge budget blowouts and missed completion deadlines.
Palmer was set to receive royalties from the project after CITIC purchased the original tenements from him in 2006.
The Sino iron ore project has run into a spate of delays and cost blow-outs during the commissioning phase, and late last year the company blamed the skills shortage, bad weather, and the inexperience of its lead contractor for delays on the project.
The West Australian Government first sought to remove Mineralogy as a port operator in February, while CITIC has previously asked for treasons behind the appointment.
"We are aware of the issue and there is a process in place," Vivienne Ryan, a spokeswoman for the WA Department of Premier and Cabinet, said last night.
"We have nothing further to add."
Mineralogy was not available for comment at the time of publication.