Engineering, Logistics, Ports & Terminals, Mining and Heavy Industries

Roy Hill launches court action over Samsung contract

Roy Hill train. Photo: Roy Hill

Roy Hill will take Samsung to court over millions of dollars-worth of potential penalty payments, over the delivery of the Roy Hill mine in Western Australia.

A brief hearing in WA’s Supreme Court mentioned the new legal proceedings, according to a report in The Australian.

Samsung C&T, the giant Korean conglomerate, is the lead contractor for the delivery of the Roy Hill mine and iron ore project.

The first shipment from the project has been delayed past the planned October 21 date, and Roy Hill believes Samsung should have to pay penalty payments of up to $2 million per day for every day the project is delayed.

Roy Hill said on October 14 that despite media reports that Roy Hill would celebrate its first shipment on October 21, the process had been delayed. Roy Hill originally wanted to ship first ore by September 30, but gave Samsung an extra month’s leeway, which has now been past.

“The first shipment is imminent in the coming weeks,” Roy Hill said at the time, “but will occur after 21 October 2015.”

The company added: “For projects of this scale and complexity it is not unusual for minor slippages such as this. Our equity partners and lenders are fully aware of this schedule and are supportive.”

According to the Australian report, Samsung laywers did not show up to the court hearing, believing Roy Hill had filed it incorrectly.

Samsung’s contract was awarded in 2013 and was worth US$5.8bn. As part of the deal, Samsung was responsible for handing out and financing the smaller contracts which would deliver the project.

Western Australian Premier Colin Barnett reportedly believes the first Roy Hill shipment won’t come until 2016.

He was quoted by the AFR this week, saying: “I suspect it probably would be early next year, but that is my guess.

“[It is] a $10bn project; a mine, a railway, a port and then all the equipment has to be commissioned, they have to get the safety regimes in place and any of these projects take a lot of time.”

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