Rinehart’s Hancock Must Face Trial on Wright’s Mine Claim
Supreme Court of Western Australia Justice Rene Le Miere in Perth today rejected Hancock’s request to dismiss without trial the lawsuit claiming ownership of half of the company’s stake in a mine being built in Western Australia.
“I am unable to reach the required level of certainty that the defense will succeed,” Le Miere wrote in his decision.
Wright Prospecting Pty is seeking 50 percent of Hancock Prospecting’s stake in three tenements, known as Hope Downs 4, 5 and 6, according to a copy of the writ filed Sept. 24 in Perth. Hancock Prospecting and Rio Tinto Group (RIO), the world’s second-largest exporter of iron ore, jointly own the Hope Downs assets under a 2005 agreement.
“Wright Prospecting welcomes the judge’s decision,” the company said today in an e-mailed statement. “Wright Prospecting now intends to resume proceedings in this matter.”
Hancock Prospecting Chief Financial Officer Jay Newby didn’t immediately respond to an e-mailed request for comment today.
The $1.6 billion Hope Downs 4 project, owned 50 percent by Rio, will have annual capacity of 15 million metric tons when it starts production this year, according to an August statement from Rio. It’ll be Rinehart’s second operating mine after the $1 billion Hope Downs 1.
Wright Prospecting was founded by Peter Wright, who discovered the iron ore deposits with Rinehart’s father, Lang Hancock. Rinehart inherited the mining assets and is chairman of the company Hancock founded.
Wright Prospecting’s lawsuit is “curious” as Rinehart, Asia’s richest woman, announced a mining partnership for the properties with Rio Tinto more than seven years ago, Newby said after the lawsuit was filed.
Wright Prospecting “waited until now, when construction of the Hope 4 mine is nearing completion, and has provided none of the significant funding required for such, to lodge such an unusual bid for unearned late participation,” Newby had said.
Rinehart is the 34th richest person in the world, with a net worth of $19.5 billion, according to the Bloomberg Billionaires Index.
Wright Prospecting, in its lawsuit over Hope Downs 4, 5 and 6, accused Hancock Prospecting of breach of trust for selling the property without its consent and breaches of fiduciary obligations, according to the writ.
Wright Prospecting sought an accounting of all profits earned by Hancock Prospecting from those assets and compensation for the breaches. It also asked the court to declare Hancock Prospecting held half the property in trust for Wright Prospecting, and to award it any proceeds from the sale and royalties Hancock Prospecting received.
The case is between Wright Prospecting Pty and Hancock Prospecting Pty. Civ2617/2012. Supreme Court of Western Australia (Perth).
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