WA Court Orders Hope Downs Royalties to Wright, Rhodes

Western Australia's Supreme Court ruled on Wednesday that Hancock Prospecting, owned by Australia's richest person Gina Rinehart, and mining giant Rio Tinto must pay royalties potentially worth hundreds of millions of dollars to the descendants of her late father's business partners from the Hope Downs iron ore mine complex in the state's Pilbara region.

Justice Jennifer Smith ordered that Wright Prospecting, representing the family of Peter Wright, receive half of the 2.5 percent royalty Hancock Prospecting gets from Rio Tinto for its 50 percent stake in the joint venture. This equates to a 1.25 percent share for Wright Prospecting, covering past and future production from certain Hope Downs mines dating back to 2007. The judge also granted a smaller royalty to DFD Rhodes, the company of prospector Don Rhodes' descendants, based on a 1969 agreement with Lang Hancock and Peter Wright. Exact amounts will be calculated in a separate trial.

The ruling rejected Wright Prospecting's broader claim for partial ownership of the mining tenements, confirming Hancock Prospecting's exclusive control over the assets. It also dismissed separate claims by two of Rinehart's children, John...