re: Ann: MCC Ordered to pay A$80million into ... MCC ordered to...

re: Ann: MCC Ordered to pay A$80million into ... MCC ordered to cough up
Kristie Batten
Wednesday, 27 June 2012

THE Supreme Court of Western Australia has ordered Metallurgical Corporation of China to pay $A80 million into escrow pending the resolution of a dispute with Cape Lambert Resources over the $400 million purchase of the Cape Lambert magnetite project in 2008.

MCC had paid $320 million to Cape Lambert but Cape Lambert started legal action in September 2010 to recover the balance.

Yesterday the court ordered MCC to pay the outstanding amount into an escrow account pending the resolution of the dispute.

The two parties entered mediation in Singapore last month but the dispute was yet to be resolved.

Cape Lambert remains in talks with the Australian Tax Office over a $66.96 million amended tax assessment and $28.8 million penalty, part of which relates to the MCC sale.

The amended assessment relates to $41.2 million in tax relating to its acquisition in June 2009 of the Lady Annie project and joint venture interest in the Lady Loretta projects in Queensland from CopperCo, $16.3 million in tax for proceeds from its disposal of the Cape Lambert iron ore project to MCC and $9.3 million related to a shortfall in interest charges.

The company is cooperating with the ATO but says it will vigorously defend its position.