BC Iron has announced settlement of its dispute with former contractor Watpac, with the settlement including a final payment by BC Iron and its joint venture partner Fortescue Metals Group.
BC Iron has announced settlement of its dispute with former contractor Watpac Civil & Mining, with the settlement including a final payment by BC Iron and its joint venture partner Fortescue Metals Group.
BC Iron had been claiming more than $90 million while Watpac had a counterclaim worth $52 million.
BC Iron chief executive Alwyn Vorster said he was pleased to have settled the matter on acceptable terms.
"BC Iron can now reposition its focus on progressing the company's strategic Buckland mine-to-port development project, and potential new business initiatives," he said.
The legal dispute arose after BC Iron closed its Nullagine iron ore mine in the Pilbara.
BC Iron commenced legal proceedings against Watpac in December last year seeking damage recovery after alleging the contractor failed to fulfil its obligations when it worked at the project.
At the same time, Watpac was seeking about $12.5 million from BC Iron in relation to a one-off $2 million payment as a result of its early contract termination, coupled with BC Iron’s requirement to purchase $6.4 million worth of plant and equipment.
In February, BC Iron said in a statement that it had received a counterclaim from Watpac last week, with the contractor now seeking up to $52.8 million.
“A significant portion of the counterclaim is for amounts which were not invoiced or claimed by Watpac until after the contract had been terminated,” the iron ore miner said.
“This portion relates to retrospective claims for additional amounts or adjustments previously invoiced by Watpac and paid by BC Iron during the course of its mining services contract with Watpac.”
In April BC Iron notified Watpac that its estimate of the damages the Nullagine joint venture suffered as a result of Watpac's failure to comply with its contractual obligations was $91.8 million.
