Palmer attacked for standing up to China

Palmer United Party leader Clive Palmer is coming under increasing attack as the day approaches when his senators will have the ability to do damage to the Government’s dream of remaking Australian society though its far-reaching Budget measures.  

The latest salvo comes from the Rupert Murdoch-owned Australian newspaper which carried a front page lead story on Western Australian Premier Colin Barnett’s complaint that the billionaire iron and coal magnate was harming the nation’s relations with China.

According to Barnett, Palmer’s decision to take his Hong Kong-based partner, Citic Pacific, to court in a dispute over the $10 billion Sino Iron project “has hurt Australia’s economic interests and its reputation in China...to put it bluntly, the Chinese hate Palmer”.

The Sino Iron project at Cape Preston, 100 kilometres south west of Karratha in Western Australia’s Pilbara region, is a joint venture between Citic and Palmer’s Mineralogy company. It is processing magnetite iron and is expected to generate for than $100 billion for the Australian economy and $5.5 billion in royalties to the State Government.

However, the parties are in dispute over the amount of royalties owed to Mr Palmer and are engaged in a contest over control of the project.

As a result, while Sino Iron is now producing, it is years behind schedule and, by some accounts, $6 billion over budget.  

There are rights and wrongs on both sides, but if no mutual agreement can be found, then it is inevitable that the matters will go to court. Citic will certainly not be backing down, so Barnett’s position would apparently be to give it all it wants without any legal examination.

The Premier himself admits that Palmer has not acted improperly but “unfairly” and is “trying to scrounge out every last dollar” from the project. Of course the Chinese are paragons of fairness and would never dream of pushing to get the maximum benefit for themselves.

In a recent article, Ky Krauthamer, an analyst for OilPrice.com listed just a few of the leading Chinese companies and leading business executives currently under investigation in a corruption crackdown launched by President Xi Jinping.

“One of the biggest fish was netted in September when officials announced that China National Petroleum Corporation’s former chairman, Jiang Jiemen, was under investigation,” Krauthamer writes.

CNPC is the largest integrated energy company in China.

Krauthamer lists another seven top executives under investigation, while a further three, from Sichuan Star Cable, have “disappeared” and a fourth either fell or jumped to her death.

Dealing in that kind of business and commercial climate, it is no wonder that Palmer is guarding every dollar – and yet another reason why Australia needs to diversify its trading links.

Lazy business practices have led to an unhealthy Australian reliance on exports to China, currently running at $101 billion a year – more than double that of its next largest partner, Japan, while India, with its vast potential for growth under a new economically progressive government, is a poor fifth at $11.4 billion.

Perhaps Clive Palmer will see the possibilities even if the China-blinkered Barnett does not.