CITIC Limited Half-Year Report 2019

50 CITIC Limited Half-Year Report 2019 For the six months ended 30 June 2019 3 Critical accounting estimates and judgement (continued) (b) Mineralogy Pty Ltd (“Mineralogy”) disputes (continued) Tenure claim (continued) The CITIC Parties bring claims for breach of contract, of unconscionable conduct under the Australian Consumer Law, and in estoppel. Mr. Palmer is sued as an accessory to the unconscionable conduct claim. The CITIC Parties seek orders requiring Mineralogy to take the four steps listed above, and to pay the CITIC Parties damages for its failure and refusal to do so. Damages are also sought from Mr. Palmer. The State is joined to the proceeding as a necessary party, because it is a party to the State Agreement, but no relief is sought against it. Mineralogy and Mr. Palmer made a cross-vesting application in which they sought orders that Proceeding WAD 471/2018 be transferred to the Supreme Court of Western Australia. On 17 May 2019, Justice Banks-Smith determined that it was appropriate for this proceeding to be transferred to the Supreme Court of Western Australia. The proceeding was admitted to the Commercial Managed Cases List of Justice K Martin on 10 June 2019 (“Proceeding CIV 1915/2019”). At a Strategic Conference held on 16 August 2019, Justice K Martin made certain orders, including an order listing the matter for a two day mediation on 16 and 17 October 2019 before Registrars of the Supreme Court. No trial date has been set for this proceeding. Minimum Production Royalty Disputes The MRSLAs required each of Sino Iron and Korean Steel to produce a minimum of six million tonnes of product by 21 March 2013, unless prevented from doing so by: (a) an act, matter or thing outside their control; (b) Mineralogy doing, or failing to do an act (under the MRSLAs or otherwise); or (c) a failure to obtain all government approvals necessary to allow them to do so (provided Sino Iron and Korean Steel used best endeavours to obtain such approvals in a timely manner). If Sino Iron and Korean Steel failed to do so, they were each required, within one month of that date, to pay Mineralogy the equivalent of the Mineralogy Royalty payable on the amount of magnetite ore required to produce six million tonnes of iron ore concentrate (“Minimum Production Royalty”). The Minimum Production Royalty has been the subject of earlier proceedings, including Proceeding CIV 1808/2013 and also Proceeding CIV 3011/2017 and Proceeding CIV 3166/2017 (the latter two proceedings having been subsequently discontinued by Mineralogy). Notes to the Consolidated Financial Statements