The Western Australian Supreme Court has moved to prevent Clive Palmer's mining company from acting on a termination notice it issued to its Chinese business partner.

Mineralogy says it has given Citic Pacific 21 days notice that its right to mine ore at the Sino Iron Project in Western Australia will be terminated.

The Australian company says the termination notice was served on its Chinese partner on September 12, giving Citic until October 3 to comply.

Mineralogy says it served a default notice on Citic Pacific more than two years ago, and the company's founder and Federal MP Clive Palmer says the issues raised have not been addressed.

"This is a $10 billion project involving many hundreds of millions of dollars, they've failed to pay their royalties to us and they've shipped over $200 million worth of product to China and not paid for it," he told ABC Radio's The World Today program.

Mr Palmer says that 30 or 40 meetings with Citic and mediation undertaken with the assistance of former Federal Court judge Raymond Finkelstein have failed to resolve the issues, and prompted the termination notice.

"We issued default notices to Citic for things they'd done in breach of the contract back in 2012, and they failed to remedy the breaches, and they failed to get an injunction to restrain us so they must have acknowledged that they did breach the contract," he said.

"We've tried for two years to amicably settle those things, but they haven't done that."

Court grants Citic interim injunction

However, the Supreme Court in Western Australia issued an interim injunction preventing Mineralogy from acting on a termination notice.

Citic says Mineralogy has previously undertaken, or been ordered by the court, not to rely on several default and termination notices over the past few years.

The company also argues all royalties owed to Mineralogy have been paid, in addition to the $415 million it paid to acquire the rights to the Sino Iron Project.

Late on Friday Justice Joshua Edelman granted Citic an interim injunction until a hearing on December 18, when a trial date is expected to be set.

Citic said it is "pleased" by the court's preliminary decision.

"The court has also restrained Mineralogy from issuing further termination or suspension notices," the company said in a statement.

"This ensures that operations at Sino Iron can continue without interruption. Sino Iron has been exporting quality iron ore concentrate."

Latest in a string of legal battles

Mineralogy says it issued the termination notice after Hong Kong authorities started legal proceedings against Citic Pacific's former chairman and five former directors.

"Not only has Citic Pacific Limited failed to rectify the defaults in the notice, the directors of Citic Pacific failed to declare the default notice to the market in Hong Kong and may have breached the law," Mineralogy director, and Mr Palmer's nephew, Clive Mensink said in a statement.

Mr Mensink says Mineralogy is considering making a complaint to Hong Kong authorities about the alleged failure of Citic Pacific directors to inform the Hong Kong stock exchange of the 2012 default notice.

Sorry, this audio has expired Clive Palmer explains the decision to terminate Citic Pacific agreement

Mr Palmer's Mineralogy has also been embroiled in a series of Australian legal battles with Citic Pacific.

One is being played out in the Western Australian Supreme Court over royalty payments that Mineralogy allege are owed to it by Citic Pacific.

A separate matter has been launched in the Queensland Supreme Court by Citic Pacific alleging that Mr Palmer used money from a bank account that was meant to be spent on port operations to help fund his election campaign.

Mr Palmer told The World Today that these allegations are "just a made up story like Alice in Wonderland that the press can run", but then ended the interview and hung up when asked further questions on the issue.