From the FT:
In a long mea culpa accompanying its annual results on Thursday, Chang Zhenming, who was brought in to replace Mr Yung as Citic Pacific chairman in 2009, said the “ironic fact” of meeting its first major milestone was that its first shipment from the blighted Pilbara development would dent profits in the near term.
“So the ironic fact is that in meeting the major milestone of first export shipment our company’s financial results will suffer in the short term. I want to prepare you for these realities,” said Mr Chang. He said that costs per tonne will remain high until the project reaches its design capacity of 24m tonnes annually, in about two years’ time.
…Citic Pacific’s net income rose 9 per cent year-on-year to HK$7.6bn in 2013, but its iron ore division lost HK$1.6bn, after it began paying interest expenses and other charges that had been rolled up until the mine began operating.
…But the project was dogged by problems ranging from size and complexity, to MCC’s attempt to use Chinese labour rather than pay more expensive Australian wages, to disputes between the Chinese companies and their Australian partners.
One of those partners, Clive Palmer, put the boot in:
Mr Palmer said on Thursday night he was not surprised to hear of the increased losses, saying the project had been “beset by stupid decisions”.
