Chinese conglomerate Citic has warned it may suspend operations at its Sino Iron mine in Western Australia if it can't resolve legal disputes with Clive Palmer's Mineralogy over royalty payments and land access.

Citic chairman Chang Zhenming in a letter to shareholders on Tuesday about the group's first half results said Sino faced "unique challenges with privately-held Mineralogy", whose "uncooperative and adversarial approach poses a threat to the future of Sino Iron".

Clive Palmer's Mineralogy claims it is owed money by Sino Iron. Credit:Alex Ellinghausen

Citic paid Mineralogy $US415 million in 2006 for development rights for the Sino Iron mine, and agreed to pay ­Mineralogy royalties.

However, the project - China's largest overseas mining investment - ran years late and came in nearly $US7.5 million over budget. The mine is targeting 15 million tonnes of iron ore this year, still well below its ultimate target of 24 million tonnes.