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TRADE WARS
Spanish PM visits China in bid to boost trade
by Staff Writers
Beijing (AFP) Sept 25, 2014


Australia's Palmer seeks to end China's CITIC mining rights
Sydney (AFP) Sept 26, 2014 - Australian tycoon Clive Palmer's Mineralogy on Friday served a notice on Chinese-owned CITIC Pacific to terminate its mining rights to a multi-billion-dollar iron ore project in the latest clash between the two firms.

Mineralogy director Clive Mensink said the 21-day notice of termination came after his company served a default notice on Hong Kong-based CITIC Pacific in July 2012.

"Not only has CITIC Pacific Limited failed to rectify the defaults in the notice, the directors of CITIC Pacific failed to declare the default notice to the market in Hong Kong and may have breached the law," Mensink said in a statement.

He added that the termination notice was served on September 12 but CITIC Pacific's directors had "failed to make a public announcement or inform the market".

Mensink called for the Hong Kong Stock Exchange and authorities to investigate.

CITIC in Australia said the Supreme Court of Western Australia was scheduled to hear an application later Friday for an injunction to stop Mineralogy from issuing such notices.

The company added in a statement that "in addition to the US$415 million paid by CITIC to Mineralogy to acquire its rights at the Sino Iron Project, all royalties that are owed and calculable have been paid in full by CITIC to Mineralogy".

Palmer, also a politician who wields crucial balance-of-power votes in the upper house Senate, told ABC radio that Mineralogy's 30-40 meetings with CITIC failed to resolve their issues and led to the termination notice.

"This is a Aus$10 billion (US$8.8 billion) project involving many hundreds of millions of dollars, they've failed to pay their royalties to us and they've shipped over Aus$200 million worth of product to China and not paid for it," he claimed.

Palmer is locked in a long-running legal dispute over royalties and port operations with CITIC Pacific relating to the Sino Iron magnetite project in Western Australia, a partnership with China's state-owned Metallurgical Group Corporation.

CITIC is mining for magnetite iron ore on Palmer's sprawling Mardie Station cattle farm under a 25-year lease in what has been described as China's biggest single investment in a resources project in Australia.

CITIC Pacific recently assumed Chinese conglomerate CITIC Group's assets as part of a move to list in Hong Kong.

The city's regulator, the Securities and Futures Commission, brought a case against CITIC and five of its former directors this month for allegedly misleading investors over when it became aware of a multi-billion-dollar loss from a currency bet.

Spanish Prime Minister Mariano Rajoy on Thursday made his first visit to China, meeting with top officials in Beijing on a trip aimed at expanding trade with the Asian giant.

Rajoy and Chinese Prime Minister Li Keqiang signed more than 10 deals worth over $4 billion, Li told reporters at the Great Hall of the People. Details on the agreements were not immediately available.

"This indicates that the economic cooperation between China and Spain is effective and has huge potential," Li said.

"Spain is an influential European country," he added. "We hope to strengthen our relationship with the EU through our relationship with Spain."

Rajoy noted Spain's "very difficult economic moments" over the past few years but added that country's second-quarter growth was the fastest of any in the Euro region.

"This is encouraging and offers a great opportunity," he said. "I hope this is a starting point to further economic development."

Spain emerged in the second half of 2013 from its second recession since 2008 when a labour-intensive property bubble burst, crippling the economy and throwing millions of people out of work.

The Spanish economy, the eurozone's fourth-biggest, grew by 0.6 percent in the second quarter compared with the previous three months, the National Statistics Institute (NSI) said last month.

Its overall unemployment rate is still extremely high, however, at nearly 24.5 percent according to the latest official figure.

Spain's third-largest source for imports is China, after Germany and France, with mobile phones and apparel comprising about half that amount, according to Rajoy's office.

By contrast, China is Spain's 13th leading export client, and its 17th leading destination for investment, Rajoy's office said.

Asked Thursday about the trade imbalance between the two, a Chinese foreign ministry spokeswoman maintained that China "has never intentionally sought a trade surplus".

"We are willing to improve our bilateral trade between China and Spain," spokeswoman Hua Chunying said. "So I believe that through this visit, the leaders will hold discussions including on improved trade ties between the two countries."

Rajoy is expected to meet Friday with Chinese President Xi Jinping as well as with the heads of leading Spanish companies in China.

As China's economy has boomed, so too has the number of its citizens traveling abroad, and Li said that Beijing hopes Rajoy "could significantly reduce the time it takes for Chinese nationals to obtain visas".

"This will help the two countries' citizens to nurture friendship and offer more convenience," he said.

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