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Proponent sued for allegedly underpaying contractor

Altura Mining
Altura Mining

An integrated multi-disciplinary construction company is taking legal action against a metal producer after receiving no payment for doing work beyond the original scope.

Civmec Construction and Engineering is suing Altura Lithium Operations in the Supreme Court of Western Australia after not being compensated for going beyond the call of duty.

The contractor claims in November 2017 it built a process plant and installed structural steel, plate work, grating, handrails and mechanical equipment at Altura’s Pilgangoora Lithium Project, 120km southeast of Port Hedland.

$2.4M missing

The plant was commissioned and began operating in 2018 but Civmec alleges it was not paid $2.4 million as promised for additional work and delays caused by the proponent failing to deliver on its contractual obligations, such as engineering deliverables and supplying free issue items.

The contractor expressed frustration with Altura for failing to resolve the dispute privately after two years had passed, and described the proponent’s offer to give shares in the company as unacceptable. It believes legal action was the last resort and is now asking for $4.5M.

“[We agreed] to payment plans to assist them throughout their ongoing difficult financial circumstances,” Civmec chief executive Patrick Tallon said in a public statement. “To be publicly praised by Altura management for the works done at the plant’s official opening and to be still awaiting payment two years later is unreasonable.”

Liquidated damages

Altura fired back at the allegations, claiming it has already paid more than 96 per cent of the full $64M amount due. It blamed Civmec for finishing three months later than planned, causing the company to suffer $2.3M in liquidated damages that would account for the $2.4M in dispute if interest is included.

“Altura denies the assertion by Civmec that an agreement that Altura would pay $2.4M plus GST was reached in January 2019 or that Civmec is entitled to other outstanding and, to date, unsupported claims of up to $2.1M,” the company said.

“The decision by Civmec to commence legal proceedings against Altura is disappointing. Altura is confident in its position and will vigorously defend the proceedings.”

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