It comes as a surprise and plenty of folks
won’t really believe it until well after significant money has changed hands,
but it looks like Clive Palmer might have finally found a buyer for the iron
ore
he’s been hawking for a couple of
decades.

The announcement by Beijing-linked Hong
Kong-listed Citic Pacific looks the goods – but some souls thought the same about a 2001 failed deal with
the NSW Government that never added up.

Citic has agreed to pay Palmer’s Mineralogy
US$215 million to buy Sino-Iron which would give it rights to mine one billion tonnes
of magnetite near the mouth of the Fortescue River in WA.
There will also be a royalty payment for ore mined and Citic is up for US$1.37
billion in infrastructure costs to get the thing happening.

But wait, there’s more. If it’s proven up
with further drilling, Citic will pay another US$200 million for another
billion tonnes plus US$1.1 billion for infrastructure costs plus options to buy
rights to another four billion tonnes – if it’s there.

Clive Palmer is an interesting character,
in the way that veterans of Joh Bjelke-Petersen’s Queensland National Party
sometimes are. Elisabeth Sexton wrote a nice feature on him in 2004 that gives the flavour of the rather
litigious man. One trusts the Citic Pacific executives read it.

A billion tonnes of iron ore is a lot of
dirt. Two billion tonnes, well it’s twice as much. And so on. The thing that
has made it a little difficult for Clive in his many attempts to sell however
much he might actually have is that his iron ore is magnetite, not the
haematite that fuels the BHP and Rio iron ore boom.

As the Citic Pacific fine print notes: “There
is no established open market value for magnetite ore.” Citic Pacific says it
will be relying on Chinese partners to look after the mining and metallurgy
stuff. One trusts they have plenty of experience with the less-popular ore.

And when Citic Pacific is happily mining,
processing and shipping the ore at the massive suggested rate, I look forward to
personally sending Clive Palmer a note of congratulations, but until then,
remembering a somewhat colourful interview I did with him when the NSW
Government was going along for his ride, I’ll just hold on to the stamp.

Peter Fray

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