Rio Tinto will face mining magnate Gina Rinehart in court again after the company appealed against a court order to pay Hancock Prospecting and another company almost $200 million.
Rio Tinto was ordered to pay Rinehart in May by NSW Supreme Court Justice David Hammerschlag after it was found the company owed royalties to Hancock Prospecting and another company controlled by mining heiress Angela Bennett.
This originates from a 43-year-old arrangement between the fathers of the two women.
The SMH reported Rio announced on Tuesday ‘a notice of intention to appeal has been filed in respect of the court’s decision’ after examining its legal options for many months.
The company has $US183 million reserved in case of any liability.
Rio’s court appeal comes as the company’s June quarter results revealed positive June quarter results, leading to solid buying of Rio shares late on Tuesday.
Hancock initiated the court action against Rio even though the two companies are in an iron ore joint venture in the Pilbara that generates majority of Hancock’s revenue.
Hancock and Wright sued Rio over rights to iron ore beneath about 150 sq km of the Pilbara.
They claimed Rio owed them royalties from more than 20 years ago, as per an agreement on May 5, 1970 by Lang Hancock and Peter Wright.
The agreement was for the Channar mine and the Eastern Range mine.
Rio previously claimed it was not required to pay royalties to the descendents of Hancock and Wright as the company did not always control the land.
It lost control in 1974 and regained control in 1979.
But counsel for Rinehart and the Wright family, Allan Myers QC, said in March Rio’s claims were ‘commercial nonsense’ and did not fulfil the terms of agreement made in 1970.
Hancock is also in dispute with Bennett’s Wright Prospecting. Wright Prospecting is contemplating iron ore tenements in the Pilbara.
Rio’s June quarter results revealed the 51.8 million tonnes of iron ore it produced in the quarter beat expectations slightly, considering the recent rain and equipment failure disruptions.
It meant Rio was able to sustain its full-year guidance of 265 million tonnes of iron ore in 2013, counting volumes owned by joint venture associates.
Rio’s copper section revealed the recent wall collapse at Kennecott Mine in the US would not impact copper production as much as expected. There will be 100,000 tonnes less copper mined than previously expected, compared to 125,000 tonnes as first thought.
Rio shares closed on Tuesday 75c higher than Monday at $55.52.