Rio, Rinehart discussed risk of third-party claim to mine venture

afr.com:

Senior Rio Tinto executives and Gina Rinehart discussed the risk that their lucrative iron ore joint venture may attract a royalty claim from another Perth mining dynasty in 2005, a court has heard.

But lawyers for Rio Tinto argued on Friday that revelations of the years-old discussions about a potential liability to pay Wright Prospecting mining royalties are not proof they ever considered that the company could claim an ownership stake in the project.

Gina Rinehart is locked in a court battle with the descendants of her father’s business over royalties from a mining tenement in Western Australia’s iron-rich Pilbara region. Getty

Almost 20 years after Rio Tinto and Hancock Prospecting struck a deal to mine Hope Downs, descendants of Lang Hancock’s former business partner Peter Wright are now demanding both royalties from the project, and a proprietary claim to the parts of the mine itself.

The court heard that Mrs Rinehart, Australia’s richest woman, acknowledged “question marks” over the potential to future royalty claims from other WA mining families as part of discussions with Rio Tinto in the mid-2000s.

However, lawyers for Hamersley Iron – the Rio Tinto subsidiary that inked the mining deal with Hancock Prospecting to develop Hope Downs – said discussions of a potential liability to pay royalties didn’t prove the parties considered a separate equitable claim to the project.

Grant Donaldson SC described Hamersley and Rio Tinto as an “innocent purchaser” in the mammoth mining deal.

“To make such a finding, the court is required to be convinced Hamersley executed the agreement knowing certain representations given were false, and that’s a serious thing indeed,” Mr Donaldson said.

“When one looks at these documents and