The Brief:
Gina Rinehart must share royalties from Hope Downs with rival mining heirs, but keeps ownership of the Pilbara tenements in a split WA Supreme Court decision.
The quantum fight is just beginning, with estimates ranging from A$18m a year to nearly A$900m in total.
Fifteen years of litigation. A 1,655-page judgment. And ultimately, nobody won clean.
Justice Jennifer Smith of the WA Supreme Court handed down her decision in one of the most expensive corporate disputes in Australian history, confirming that Gina Rinehart's Hancock Prospecting will hold onto the Hope Downs tenements but must share royalties with two rival mining dynasties.
The dispute
The dispute traces back to the 1950s, when school friends Lang Hancock and Peter Wright began pegging out vast iron ore deposits across the Pilbara's Hamersley Range.
The pair formalised their arrangement under a joint venture called Hanwright, securing mineral rights and splitting royalties with Don Rhodes, another prospector who joined their ranks. Decades of amendments followed, culminating in a 1987 deed that became the fault line for everything that came after.
At the heart of the issues raised by the parties to the proceedings were a number of formal agreements made decades ago between men who were friends or colleagues who for some years engaged in harmonious and cooperative arrangements to explore, discover and prospect for iron ore in the East Pilbara.
Wright Prospecting filed suit in 2010, claiming it had been improperly denied royalties and equity it was owed under the Hanwright partnership. The case didn't reach trial until 2023.
Fifty-one hearing days, more than 4,000 documents, and two years of deliberation later, the judgment landed.
The decision
The royalties flow from Hope Downs, a 50/50 joint venture between Hancock and Rio Tinto that produces around 50 million tonnes of iron ore a year. Hancock collects a 2.5% royalty from Rio. Half of that, Justice Smith ruled, belongs to Wright Prospecting, controlled by billionaire Angela Bennett and her nieces.
Under the 1987 partnership agreement, Wright had given up its ownership stake in the tenements but, Justice Smith found, had never surrendered its right to a royalty.
Wright's bigger play, an ownership stake in the broader East Angelas tenements, was knocked back. Justice Smith found it “would be unjust” to allow Wright Prospecting to “swoop in and enjoy all of the fruits” of Hancock’s development without having contributed to any of the risks over the years.
DFD Rhodes, representing the heirs of Don Rhodes, also landed a partial royalty win, secured on equitable grounds after its contractual claim under a 1969 agreement failed.
Rio Tinto was found jointly liable alongside Hancock for the payments, meaning the bill gets split.
What that bill looks like remains the central unanswered question. Wright Prospecting puts the total owed at close to A$900m. Hancock says A$18m a year. A separate quantum hearing will decide who is closer to the right.
Two of Rinehart's children, Bianca Rinehart and John Hancock, also came away empty-handed. Their claim to a stake in the tenements via a family trust fell at the first hurdle, with Justice Smith finding the assets properly belonged to Hancock Prospecting.
Their broader inheritance fight with their mother heads to private arbitration.
Who acted
The courtroom was packed with 27 barristers across seven parties, burning through an estimated $250,000 a day in legal costs.
Wright Prospecting, instructed by Clayton Utz, was led by Julie Taylor SC and John Rowland KC, alongside Eric Heenan SC.
Hancock Prospecting and Hope Downs Iron Ore were both instructed by Corrs Chambers Westgarth, and led by Noel Hutley SC, a Rinehart favourite and Peter Brereton SC, commanding over $35,000 a day.
Bianca Rinehart and John Hancock were led by Christopher Withers SC, instructed by YPOL Lawyers.
Hope Rinehart Welker retained James Willis, instructed by Deutsch Miller.
Ginia Rinehart was represented by Kate Lindeman, instructed by Dentons Australia.
DFD Rhodes retained Jeremy Stoljar SC and Kim Lendich SC, instructed by Perth firm Taylor & Taylor.
Rio Tinto's subsidiary Hamersley was led by Grant Donaldson SC, with Allens instructing.
Legal costs for each side are estimated to exceed $100m, and appeals are widely expected.
With Rinehart's net worth, she can afford the fight — but the question is whether anyone involved has the appetite for another decade of it.