A Western Australia Supreme Court ruling on Wednesday found that Hancock Prospecting, the company owned by Gina Rinehart, and joint-venture operator Rio Tinto must pay royalty shares to the descendants of two former partners involved in the early development of the Hope Downs iron ore deposits. The judgment said the payments could amount to hundreds of millions of dollars overall.
The dispute, which has run for 15 years, concerns the Hope Downs mine complex in the Pilbara region. The court held Rio Tinto jointly liable alongside Hancock Prospecting for royalty payments tied to some of the mines within the complex.
The litigation traces back to arrangements between Lang Hancock and Peter Wright. The two men teamed up in the 1950s to secure mineral rights over the area that later became Hope Downs. In 1969 they entered a separate agreement with businessman Don Rhodes, which provided for a small royalty percentage on ore produced from the area.
The core of the recent lawsuit centred on the partnership and asset division between Wright and Hancock, as codified in an agreement originally negotiated in the 1970s and later amended prior to Wright's death in 1985. Descendants of Rhodes also advanced claims under the 1969 agreement, the court record shows.
Justice Jennifer Smith of the Supreme Court of Western Australia determined that the companies representing Wright's and Rhodes' descendants - Wright Prospecting and DFD Rhodes - are entitled to a share of both past and future royalties from certain Hope Downs mines. The judge left the computation of the precise sums to a subsequent trial.
Commenting on the ruling, a spokesperson for Wright Prospecting said: "After many delays, we are pleased to finally receive a result in our favour. The decision is lengthy and complex. We will review it in detail before determining if any further steps need to be taken."
DFD Rhodes did not immediately reply to a request for comment.
A Rio Tinto spokesperson said the company "acknowledged the decision of the court and would fully consider the judgment in detail."
Hancock Prospecting's Executive Director Jay Newby framed the ruling in the context of the investment required to develop Hope Downs, stating: "Bringing Hope Downs to life required significant investment in exploration, evaluation and development, obtaining thousands of government approvals, securing major project financing and a joint venture partner."
In Newby's statement the company quantified the royalty claims at an annual level, saying they would amount to about A$4 million per year for Rhodes and around A$14 million per year for Wright Prospecting. The court has yet to fix the total sums for past royalties and any ongoing entitlement; those figures will be determined at a later trial.
The judgment reinforces that multiple parties can have enforceable royalty interests arising from historical partnership and royalty agreements tied to mineral rights. The ruling does not itself set the final monetary awards, but it confirms the legal entitlement of Wright Prospecting and DFD Rhodes to royalty shares from specified Hope Downs operations.
Currency note: ($1 = 1.4008 Australian dollars)