Chinas CITIC has flagged big impairments to the value of its Pilbara magnetite project for the third year in a row, saying it expected to write down the value of Sino Iron by US$800 ($1038) to US$1 ($1.30) billion in next months annual results.

 CITIC spent more than US$10 (12.9) billion building the magnetite project, and began commissioning the sixth and final production line last May.

The company told the Hong Kong exchange yesterday it expected to take a further hit to the book value of its flagship iron ore project despite this years surging iron ore price, given the lower long-term outlook for commodity prices.

The concentrator at CITIC's Sino Iron magnetite project.

The concentrator at CITIC's Sino Iron magnetite project.

It is the third year in a row CITIC has written down the value of the massive mine and infrastructure project. It took a $2.27 billion after-tax impairment on the project in its 2014 accounts, and wiped another net $2.2 billion hit a year ago.

The company said it exported 11 million tonnes of concentrate from the project in 2016, less than half of the projects ultimate 24 million tonne a year run rate.

CITIC again warned its ongoing dispute over royalties with Clive Palmer will have a major bearing on the long-term viability of Sino Iron, its profitability and cash flow.

CITIC recently appealed a decision requiring its Australian iron ore operations to make interim royalty payments to Mr Palmers Mineralogy. A trial over how export royalties should be calculated from the project will be held later this year.

Image: Citic's Sino Iron project. The West Australian.