Rinehart sued for half of her cash cow mine by former partner and rival billionaire
Thursday, September 27, 2012/
Gina Rinehart is back in court again and risks losing half of her assets in Western Australia’s Pilbara region after the family of her father’s former business partner sued her.
Peter Wright discovered the lucrative iron ore deposits on the Hope Downs property with Rinehart’s father Lang Hancock, but following the death of both Hancock and Wright, Rinehart seized control of Hope Downs.
Now rival billionaire Angela Bennett, Wright’s daughter, is trying to seize control of some of the tenements and claim a share of the profits after the death of her brother, Peter Wright, earlier this year.
Through the case brought by Wright Prospecting in the Supreme Court of Western Australia, Bennett is accusing Rinehart of a breach of trust for selling the Hope Downs property without Wright Prospecting’s consent and breaches of fiduciary obligations.
Wright Prospecting claims Hancock Prospecting has been making commercial decisions regarding the properties without its involvement.
“Wright Prospecting is now trying to recover its interest in those tenements,” Wright Prospecting said yesterday.
Hope Downs comprises six iron ore deposits, two of which are held in a 50/50 joint venture between Hancock Prospecting and miner Rio Tinto.
Bennett and Wright Prospecting are seeking 50% of Hancock’s stake in the Hope Downs 4, 5 and 6 tenements, according to a copy of the writ filed in the Supreme Court of Western Australia and obtained by Bloomberg News.
Jay Newby, Chief Financial Officer at Hancock Prospecting, told SmartCompany Hancock Prospecting does not understand the writ.
“Without Wright Prospecting we have held the Hope Downs tenements 4, 5 and 6 for more than 20 years and Wright Prospecting have not contributed towards them financially in this period,” he said.
“Further, Wright Prospecting is aware that we did a deal with Rio Tinto Iron Ore more than seven years ago for a half interest in these tenements.”
SmartCompany contacted Wright Prospecting for comment but it failed to respond before publication.
Hope Downs is significant to Rinehart for both sentimental and financial reasons. Named after her late mother Hope, the property is crucial to Rinehart as she is using the royalties from it to fund Hancock Prospecting’s proposed Roy Hill iron ore mine in the Pilbara.
Hope Downs 4, owned 50% by Rio, will have an annual capacity of 15 million metric tons once it is operating next year and will cost $1.6 billion to build, according to an August statement from Rio.
The dispute over Hope Downs between the heirs of Hancock and Wright is the latest in a long string of legal battles for the iron ore empress.
1. Rinehart v Wright
This case is the escalation of a previous legal battle over royalties between the Wright and Hancock families.
They have been embroiled in an 11-year legal stoush over the Rhodes Ridge property, with a judge having awarded Rinehart’s 25% stake in it to Wright. Rinehart appealed and a decision is pending.
2. Rinehart v Porteous
Rinehart waged a legendary 11-year battle for control of the estate of her late father Lang Hancock during the 1990s against his wife Rose Porteous.
3. Rinehart v Perron
In 2010, fellow billionaire Stan Perron sued Hancock Prospecting, claiming for a larger royalty stream than the 15% of royalties he had been receiving from Rio Tinto’s Brockman mines, near Mt Tom Price.
The parties reached a confidential settlement but a statement from Perron’s company, SP Investments, suggests Perron has emerged the clear winner, with suggestions Perron could receive as much as $4.2 million a year, based on iron ore prices and the output of the Brockman mines.
4. Rinehart v Rinehart
Rinehart has also been sued by three of her four children, who are seeking to have her removed as trustee of the multibillion Hancock trust.