Why is the Western Australian Government cracking down on the Cockatoo Island iron ore mine?

The Western Australian Government has issued a forfeiture notice to Cockatoo Island Mining Pty Ltd (CIM) due to unpaid state iron ore royalties. The operating company requested a payment extension from the WA Department of Treasury, but a failure to settle the debt by the strict 2 July deadline threatens a complete shutdown of the offshore mining operation.

How much money does Cockatoo Island Mining owe the WA Government in unpaid royalties?

The exact size of the unpaid royalty bill has not been publicly disclosed. A spokesperson for the WA Department of Treasury declined to reveal the outstanding amount, citing strict confidentiality provisions embedded within the state's Mining Act.

What is the current operational status of the Cockatoo Island iron ore mine?

Operations are highly precarious despite a recent restart. After a nine-year hiatus, mining quietly resumed in November 2024, and ore exports commenced in April 2025, supported by a 21.1 million dollar capital expenditure injection during the 2025 financial year.

Who owns and controls Cockatoo Island Mining, and why is it attracting regulatory scrutiny?

The mine is ultimately controlled by Hong Kong resident Choi Lai Kuen, who acquired the mothballed asset in 2020. The ownership structure has drawn scrutiny and caused anxiety among Australian defence officials due to the mine's direct geographic proximity to the Yampi Sound Defence Training Area.

Does the Hong Kong ownership of Cockatoo Island Mining pose a geopolitical risk?

Australian defence officials have expressed anxiety over the site's proximity to a military training area, making it a higher-risk asset from a regulatory and sovereign standpoint. However, CIM has explicitly stated that Choi Lai Kuen is a private investor with diversified global interests and maintains zero links to the Chinese government.

What makes the iron ore asset at Cockatoo Island unique compared to Pilbara miners?

Cockatoo Island is historically famous for hosting ultra-high-grade deposits of iron ore, yielding grades as high as 67 per cent during its peak production years under BHP. This is significantly higher than most standard iron ore operations in the Pilbara region, which typically produce grades below 62 per cent.

What is the operational history and primary physical risk of the Cockatoo Island mine?

The mine has a highly cyclical, "on-again, off-again" history, having ceased operations five times since 1950, most recently in 2015 when Pluton Resources collapsed. Because the key Seawall pit operates below sea level, it is prone to frequent flooding, requiring massive volumes of seawater to be pumped out before mining can occur.

Image for illustrative purposes only. Not a real photo.

WA targets Cockatoo Island over unpaid royalties

Written by Heidi Cuthbert Published Jun. 8 2026Last Updated Jun. 8 2026

A remote mining venture in the Kimberley faces a major state government crackdown over unpaid iron ore royalties owed by its Hong Kong owner.

The perennially on-again, off-again Cockatoo Island mine is struggling to keep its head above water, with its operating company, Cockatoo Island Mining, requesting a payment extension from the WA Department of Treasury.

Citing confidentiality provisions in the Mining Act, a Treasury spokesperson declined to reveal the size of the bill, but the unpaid debt threatens a complete shutdown of the historic offshore site, located 135km north of Derby.

The government slapped a forfeiture notice on the main mining tenement last month, issuing a strict payment deadline of July 2.

Mining quietly resumed in November 2024 after a nine-year hiatus, with ore exports restarting in April 2025.

Despite $21.1 million poured into the site during the 2025 financial year, operations remain precarious.

The mine is ultimately controlled by Hong Kong resident Choi Lai Kuen, whose 2020 acquisition of the mothballed asset sparked anxiety among Australian defence officials due to its proximity to the Yampi Sound Defence Training Area.

CIM has maintained that Choi is a private investor with no links to the Chinese government.

The island, famous for ultra-high-grade deposits mined since the 1951 BHP era and a colourful history featuring Alan Bond's failed 1980s luxury resort, may soon pivot.

The WA Government recently approved a $300 million marine and aviation logistics base on the island by Crestlink.