RESOURCES tycoon Clive Palmer believes the trouble-prone Sino Iron project will reach full production within two years, despite such an achievement requiring an end to the culture of delays and cost blowouts on the controversial project.
Mr Palmer stands to receive hundreds of millions of dollars a year in royalties from the massive project, which is being developed by Hong Kong group CITIC Pacific.
CITIC last week lamented Australia's elongated approvals process, which it blamed for yet another delay and cost increase.
CITIC's latest advice was that the project would achieve "trial production" in November: more than two years later than original guidance.
Speaking at his resort on Queensland's Sunshine Coast yesterday, Mr Palmer said he expected full production rates — which are expected to be 24 million tonnes a year of magnetite concentrate — to be achieved within two years of the trial.
"It would be about 18 months if it were me, but CITIC will probably try and do it faster," he said.
Mr Palmer said criticism of CITIC's performance on the project — which is over budget and over schedule — was unfair, as the dimensions of the project had changed several times, rendering the original guidance irrelevant.
But CITIC conceded that among many troubles, its Chinese mining contractors had struggled to adapt to Australian conditions.
Mr Palmer said he expected his royalties on the project to be in the region of $500 million a year, but confirmed he would not receive them before production began.
Mr Palmer's royalties are tied to both the amount of iron ore mined, and the amount of magnetite concentrate exported from the project, which is near Karratha.
Mr Palmer also said he had not given up the fight to develop a major coal project in Queensland's Galilee Basin.
That "China First" project was dealt a major blow when the Queensland government awarded a rival project — operated by Indian giant GVK — priority rights to exclusively develop a 600-kilometre transport solution from the Galilee to the coast for export. But Mr Palmer said he had written to Queensland Deputy Premier Jeff Seeney demanding answers as to why the GVK project had been preferred, and vowed he was prepared to start Supreme Court action depending on the reply.
Mr Palmer's staff submitted a fresh environmental impact study for the Galilee project last week, and Mr Palmer insisted it remained economically viable despite slumping thermal coal prices.
But Mr Palmer's partners appear less convinced. Swiss commodity trader Vitol recently ended its association with the project, and Mr Palmer conceded he would have to renew his financing arrangements on the project if it is to be revived.
Mr Palmer's comments came at the end of a media tour to showcase elements of his business empire. He used his private jet to fly journalists from Fairfax Media, News Ltd, Bloomberg and Reuters to his nickel refinery in Townsville, the Sino Iron project in the Pilbara and finally to his new hotel on the Sunshine Coast.
In a typically wide-ranging interview, Mr Palmer said his plans to build a replica of the Titanic would be completed irrespective of the cost, and he was prepared to put himself on the "Centrelink queue" to ensure the replica was built.
He also vowed to respect local views if the Sunshine Coast community objected to his ambitious plans to build a mega-resort with an international airport near Coolum. If rejected, he would relocate his resort offshore.