The Australian reported that iron ore miner Mount Gibson Iron is investigating whether it can seize iron ore cargoes from the ports of Rio Tinto and other miners as it struggles to recover USD 114 million of damages awarded to it from China's Rizhao Steel.

Mount Gibson, which was awarded the damages in August over contracts Rizhao reneged on during the global financial crisis, is also pursuing the money through the Chinese courts under the UN's New York convention. The miner is hoping that by publicizing the court process, a spotlight will be shone on China's handling of its obligations under the treaty, which enables enforcement in participating countries of an arbitration award made here.

Mount Gibson's options for enforcing the payment here are limited because Rizhao's only potential Australian assets, depending on how its contracts are written, are its iron ore purchases once they are loaded on a ship. But according to documents from the major iron ore miners uncovered in Mount Gibson's court processes, shipments that Rizhao had been taking ownership of at the port are now being done through traders, meaning Rizhao does not officially take ownership of the ore in Australia. This makes success on this front unlikely.

Mr Alan Rule CFO of Mount Gibson said “Rizhao and Rio know if we can grab one of their ships, while it might only be worth $15m or $20m, it could cause some grief and they are acutely aware that's one of the angles we are working on.”

He added that he did not know whether Australian suppliers were helping Rizhao out. He said “We're just surprised that these Australian suppliers wouldn't be standing firm with Rizhao and saying you owe Mount Gibson a large amount of money -- sort it out."

Rizhao is run by billionaire Mr Du Shuanghua, one of China's richest men, who in the Rio Tinto bribery case admitted to handing over USD 9 million, as well as a house, to Rio executive Mr Wang Yong. Mr Wang received 14 years' jail, but Mr Du was not jailed.

(Sourced from theaustralian.com.au)