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The warden noted that $10,000 penalties for such behaviour were not a deterrent for large companies, and recommended Mining and Petroleum Minister Bill Johnston grant an application for Mineralogy to forfeit the licence on its Pilbara tenement.

The licence Mineralogy had held since 2013 was subject to a condition the company spend $50,000 a year on mining it.

Another miner, Leichardt Industrials, applied for Mineralogy to have to forfeit the licence after it failed to do so in the 2016 reporting year.

The Warden’s court, which deals with such disputes, had to determine if the noncompliance was “of sufficient gravity” to make Mineralogy forfeit.

Mineralogy advanced three grounds to argue that it wasn’t, the third being “financial incapacity”.

It called two witnesses to give evidence – the first, the legal counsel, was unable to give evidence as to Mineralogy’s financial position.

The second, West Australian general manager Chris Spielvogel, asserted that Mineralogy had been “starved of considerable funds that may have been used to explore and improve its existing tenements” because of a contract dispute in the Supreme Court with CITIC and subsidiaries Sino Iron and Korean Steel.

It was argued that after the court decided in favour of Mineralogy in 2017, and CITIC had paid Mineralogy almost $279 million, Mr Palmer’s company now had funds to explore the tenement and had already started doing so.

“Perhaps I could suggest to you that the company is a very wealthy one, that it has simply given no priority or ascribed no priority to this tenement?” Warden O’Sullivan asked Mr Spielvogel in the cross-examination.

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“I don’t know. I don’t have access to the finances,” Mr Spielvogel replied.

The decision said that it was readily apparent that Mr Spielvogel had no knowledge of Mineralogy's finances and there was no evidence he was told, or who told him, that the company was starved of funds.

Mineralogy provided no evidence of its financial position, the Warden noted.

“No explanation was offered as to why Mr Palmer did not give evidence or why only limited financial records were produced,” he wrote.

“Mr Palmer is the sole director and the secretary ... manages its operations and income.

“Mineralogy is not an unsophisticated litigant.”

Mineralogy’s other two arguments – first, that it had spent enough in the previous year and second, that it had big future plans for the tenement – were both also debunked.

Mineralogy at first conceded it under-spent in 2015 but argued it had spent enough in 2014 – before it transpired there was an error in its estimate for 2014 and it had in fact not spent enough on the site.

And most of the small sums spent had gone on administration, with Mr Spielvogel confirming Mineralogy had done “very little exploration actually on the ground”.

Mineralogy’s legal counsel argued Mr Palmer intended to spend $100,000 in the current reporting period and Mr Spielvogel mentioned a plan to explore and develop the tenement as part of a larger project.

But under cross-examination the legal counsel could not say that any money had been specifically earmarked for the project and Mr Spielvogel said there was no drilling program or any instructions from Mr Palmer on a plan and that there were only “some notes”.

“Mr Spielvogel went on to deny that Mineralogy had warehoused [the tenement] and had no interest in exploring it,” the Warden’s decision said.

“He said he believed that Mineralogy was not warehousing ... because it had dropped tenements in WA during this period because of lack of funds.”

The Warden recommended Mines Minister Bill Johnston grant an application to forfeit the licence. The application has not yet been received.