Iron ore war heats up over royalties

The battle between Rio Tinto, Hancock Prospecting and Wright Prospecting is close to the endgame, with the dispute over $200 million worth of iron ore royalties reaching the high court.

Two years ago Hancock Prospecting’s Gina Rinehart and Wright Prospecting director Angela Bennet won their NSW Supreme Court suit against Rio Tinto over an agreement for royalties from the Channar Mine and Eastern Range Mine.

Hancock and Wright in partnership sold the mines to Rio Tinto in the 1970s, however Rio Tinto contended that it was not required to pay royalties to the heiresses of the two mining houses as it lost control of the ventures between 1974 and 1979.

However, last year the NSW Court of Appeal partially reversed the decision in favour of the two companies because there was no continuity of title of the Channar Mine.

Channar is 60 per cent owned by Rio Tinto in a JV with Chinese company Sinosteel.

The West Australian said it was believed the Channar reversal would remove up to $80 million from the back royalties claim of $200 million, a figure Rio Tinto agreed (prior to the 2013 finding) was the amount in question if found accountable.

Rinehart and Bennett are no strangers in the courts, having fought for more than a decade over a 25 per cent stake the Rhodes Ridge iron ore deposit, which Wright Prospecting retained in 2013.
In the current dispute both sides appealed to the High Court, which will hear the matter in August.
 

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