Two of Australia’s mining magnates and richest women won a $200 million lawsuit against mining giant Rio Tinto over iron ore resources in Western Australia.
Justice David Hammerschlag from the Supreme Court ruled in favour of companies owned by billionaire Gina Rinehart, and Angela Bennett and her brother Michael Wright on Friday, stating they had the right to royalties.
The Wright and Rinehart families sued Rio Tinto over the rights to iron ore beneath about 150 sq km of the Pilbara.
They contended Rio owed them royalties from more than 20 years ago according to an agreement on May 5, 1970 by Lang Hancock and Peter Wright.
The Daily Telegraph reported the agreement for royalties was for the Channar mine and the Eastern Range mine.
Hancock Prospecting initiated the lawsuit against Rio despite the two companies being involved in an iron ore joint venture in the Pilbara that generates much of Hancock’s revenue.
Rio Tinto maintained it was not obligated to pay royalties to the descendants of Mr Hancock and Mr Wright as the company did not always control the land.
It lost control for a few years from 1974 and resumed control in 1979.
But counsel for Rinehart, and the Wright family, Allan Myers QC told the court in March Rio’s reasoning was ‘commercial nonsense’ and did not comply with the terms of the agreement made in 1970.
During the ten day hearing, Myers told the court his clients were asking for $200 million for lost royalties.
Rio had agreed to this figure earlier if found accountable.
Justice Hammerschlag said Rio subsidiary Mount Bruce Mining had to pay the Hancock and Wright descendents ‘the royalty under the 1970 Agreement in respect to ore mined in Eastern Range and Channar’.
These areas have yielded substantial profit since 1970 and Hancock has been attributed for discovering the huge iron deposits.
Meanwhile, Hancock Prospecting issued a revised version of its 2012 financial results, with changes being made on the number employees in the company.
The initial publication of the 2012 results revealed there were only 70 employees within the parent company and its group of subsidiaries, the SMH reported.
But the revised version released today said there are 252 employees overall.
The revised numbers may be an explanation for the inconsistency between remuneration and staffing patterns at the company.
The first set of 2012 results showed salaries to key staff had more than double to $22.22 million in a year when employee numbers had decreased by 44 per cent.
But the revised version illustrates increases in salaries were consistent with increases in staff numbers. Employee numbers doubled from 126 in 2011 to 252 in the 2012 financial year.
Other aspects remained the same from the initial financial reports: the company made an overall profit of $3.2 billion for the year, a number that increased by a $1.16 billion deferred tax asset from the mining tax.
The revised report also said there were 20 ‘principal subsidiaries’, in which Hancock had interest at some point during the 2012 financial year.
One of them was Roy Hill Holdings, the 70 per cent owned subsidiary through which Rinehart is looking to construct a new iron ore mine, rail and port in Western Australia.