Rio Tinto caught in the midst of warfare with Australian mining dynasties

Rio Tinto has been dragged right into a high-stakes trial pitting the billionaire descendants of Australia’s mining pioneers towards one another.

Lawyers for the Anglo-Australian agency have been within the state’s Supreme Court looking for to fend off claims over billions of {dollars} in iron ore royalties that flowed from discoveries made way back to the Nineteen Fifties and Sixties.

The bitter row centres on the Hope Downs complicated within the Pilbara area, 4 open pit iron mines collectively owned by Rio’s Hamersley Iron subsidiary and Hancock Prospecting since they went into partnership in 2005.

Hancock is run and managed by Australia’s richest particular person Gina Rinehart. who’s price an estimated £17.8billion.

She took over after the dying of her father Lang Hancock, a former asbestos miner who laid declare to discovering the world’s largest iron ore deposit in 1952 when he observed the rusty brown color of a gorge whereas flying over the distant Pilbara area in north-west Australia.

In return for creating and working the mines, named after Hancock’s second spouse Hope, Rio Tinto receives half of the royalties since they grew to become operational in 2007.

Now, a few of Rio’s profitable stake is underneath menace as the rich heirs of those that scoped out the Pilbara 70 years in the past battle over the spoils.

Angela Bennett, Australia’s fourth richest lady, claims Rinehart cheated her household firm Wright Prospecting out of royalties from the mine.

Wright Prospecting was based by her father Peter Wright, a college buddy of Lang Hancock who would later assist him uncover huge iron ore riches.

It is looking for a 1.25 per cent stake of the royalties from the Hope Downs mines, from an settlement reached with Hancock within the Nineteen Eighties. 

Meanwhile, the rich household of one other former colleague of Hancock, engineer Don Rhodes can also be preventing for a 1.25 per cent share, stemming from an settlement that was struck between the 2 males in 1969.

To additional complicate issues, Gina Rinehart’s estranged eldest youngsters John Hancock and Bianca Rinehart are co-defendants within the civil trial, alongside Hancock Prospecting.

They declare their mom stole mining property from them, which means the royalties being claimed by Wright Prospecting and DFD Rhodes are rightfully theirs.

Bianca and John, already price greater than £1billion apiece from their stake within the household empire, declare that property together with Hope Downs have been meant to be left to them by their grandfather Lang in a household belief.

When he died in 1992, they allege that their mom secretly shifted the property into Hancock Prospecting, which she then took over.

Gina Rinehart’s legal professionals argue that she was merely righting the wrongs of her father.

They declare that he had confessed on his deathbed

They claimed that he had unlawfully moved property out of the household firm behind her again to assist fund his extravagant life-style together with his new Filipina spouse and former maid Rose Porteous, together with jewelry and a non-public jet.

Rinehart despised her stepmother a lot she tried to get her deported, and later accused her of successfully nagging her father to dying on the age of 82. 

A coronial inquiry later cleared Porteous of homicide in 2002.

Old letters unearthed through the civil trial confirmed she had branded Porteous, – 40 years her father’s junior – as an ‘oriental concubine’ and a ‘prostitute’, attempting to get her arms on the household fortune. 

These slurs would open up a rift between her and her father, who kicked her off the corporate board.

Rio Tinto has largely been a bystander within the epic civil trial, which has taken over Western Australia’s largest courtroom since late July and got here to a conclusion on Thursday.

A judgement will not be anticipated till subsequent 12 months.

Rio’s senior counsel Grant Donaldson persuaded the decide to shut the courtroom to the general public on the ultimate day, arguing the issues set to be mentioned have been commercially confidential.

Earlier within the trial it emerged that the FTSE 100 agency negotiated an settlement in 2005 that shares any legal responsibility for any future claims with Hancock Prospecting, however is prone to cap its payout ought to Hancock and Gina Rinehart lose this case.

Rio has refused to enter particulars of the deal, however has performed down its potential losses. The Hope Downs mines shipped virtually 49m tons of iron ore final 12 months.

Rio’s half-share would have generated income of greater than £2.5billion, primarily based on right this moment’s iron ore worth.

Analysis performed for the Sydney Morning Herald newspaper this 12 months prompt that Rio and Hancock Prospecting may each be on the hook for £620million if Wright Prospecting and DFD Rhodes win the case.

This is predicated on them being awarded a 1.25 per cent stake for the reason that first manufacturing of iron ore from Hope Downs in 2007, plus curiosity.

Rio has described the concept that it could possibly be responsible for this sum as ‘inaccurate’. 

A spokesman for the agency mentioned: ‘This liability only arises if the court ultimately finds that Wright and/or DFD Rhodes are entitled to royalties in the main proceedings.’