Mount Gibson Iron is upping its damages claim against engineering firm GHD to almost half-a-billion dollars, eight years after a seawall collapse forced the closure of its Koolan iron ore mine.
Mount Gibson Iron is upping its damages claim against engineering firm GHD to almost half-a-billion dollars, eight years after a seawall collapse forced the closure of its Koolan iron ore mine.
The junior miner's subsidiary Koolan Iron Ore launched legal action against GHD in 2015, claiming damages in excess of $130 million over allegations of negligence and contractual breaches that crippled its business.
Operations at the Koolan Island mine off the state’s coast were brought to a halt after the seawall gave way and the main pit flooded, leading to the lay off of more than 300 workers.
Mount Gibson claims GHD had an obligation to monitor, inspect and maintain the seawall and associated infrastructure under contracts signed in 2004 and 2014.
But GHD rejected the allegations, claiming the seawall failed because Mount Gibson failed to carry out the cut-back excavations it instructed it to.
Further, GHD claimed there were monetary limits on the amounts that could be recovered and a statute of limitations on the commencement of legal action stemming from the contract.
The matter wound up back in the Supreme Court, with Mount Gibson flagging plans to amend its lawsuit, provide new details and change the quantum of its business disruption claim; with fresh calculations based on a new methodology.
The court was told the original loss claim was for $130 million plus prejudgment interest, but that Mount Gibson wanted to up that figure to $340 million plus interest.
GHD’s lawyers want an interlocutory order to have the fresh claims struck out, insisting they “grossly inflate” the damages sought under the original methodology.
Further, GHD's lawyers told the court the damages bill would now be closer to $500 million.
Justice Jeremy Allanson handed the pair deadlines to file their evidence and submissions, with the competing applications to be reviewed during a half-day hearing on December 13.
Mount Gibson already received a $64.3 million insurance pay out for the failure in 2017 after reaching a final deal with 14 insurers.
The revival of the mine reportedly set the company back $180 million, opening four years after the collapse.
