Some months ago I made some sort of rash promise to apologise to Clive Palmer if his West Australian magnetite iron ore deposit ever actually got up. It looks like the apology is getting closer.

John Phaceas reported in the Worst over the weekend that China’s Citic is pushing full steam ahead with the $3.2 billion development of Palmer’s Cape Preston project. Citic Pacific managing director Henry Fan is quoted as saying drilling to confirm stage two of the development “has been encouraging”.

The project has a colourful history, just like Clive Palmer – a former Joh-for-Canberra white shoe brigade member who did a bit of a Cazaly to grab the deposit and has spent a couple of decades trying to get it up. The problem is that the ore is magnetite rather than the Pilbara’s much more desirable haematite.

One failed attempt garnered plenty of publicity when the Carr Crash government thought it could get a new steel mill in Newcastle out of it but the consortium fell apart. A couple of aspects of the claimed deal didn’t seem to add up to me and that resulted in a rather interesting interview with Palmer on Business Sunday. Clive apparently didn’t enjoy it.

But the international iron ore boom has changed the numbers somewhat since then and Citic has paid Palmer $290 million just as a first instalment.

It’s now Citic’s problem to make the metallurgy work as Clive is already out and about spending the dosh on things such as a Versace penthouse on the Gold Coast and a private jet (a DC9 with a lot of refurbishing). No doubt BRW’s rich list will pick up him this year.

Maybe I should have qualified the offer of the apology – it should be made when Citic makes money out of it.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey