Rinehart and Rio Tinto face “mega-litigation”

Gina Rinehart is demanding Rio Tinto pay her royalties for iron ore production at the Channar and Eastern Ranges mines in the Pilbara.

According to Bloomberg Rinehart says Rio owes her and partner Wright Prospecting 2.5 per cent of sales from the sites over the next 12 years of production.

Rio denies it owes Rinehart money, and the parties are currently locked in a Supreme Court battle in New South Wales.

While details of the money at stake is confidential Rio says it expects Channar to produce 200 million tonnes in its life and iron ore prices currently hover around $US150 a tonne.

Bloomberg reports Justice McDougall yesterday told Rio to submit a calculation of royalties owed to Rinehart and Wright Prospecting.

He said if they could not agree on a quick and “just” calculation they could continue with a “mega-litigation”.

“You are the mega-parties and you carry the consequences,” he said.

Rio is currently paying Hancock Prospecting, Rinehart’s company, royalties on production at Tom Price, Marandoo, and Paraburdoo mines.

According to Bloomberg a Hancock spokesperson said Rinehart received no royalties from Rio’s Robe River operations or its biggest mine, Yandi.

Image: AAP, Tony McDonough

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.