Wright Prospecting has partial win over Hancock Prospecting in court battle over Hope Downs iron ore riches

Gina Rinehart’s Hancock Prospecting and Angela Bennett’s Wright Prospecting have both claimed a win in the multimillion-dollar legal battle over some of the world’s most valuable iron ore areas.

After presiding over a months-long WA Supreme Court civil trial in 2023, Justice Jennifer Smith found the Peter Wright-founded company was entitled to 50 per cent of royalties at the massive Hope Downs project in the Pilbara — past, present and future.

But it wasn’t awarded its push for an equal ownership interest in the parts previously known as the East Angelas assets, now known as Hope Downs 4, 5 and 6.

Hancock Prospecting executive director Jay Newby said ownership was the primary issue, labelling royalties “far less significant”.

The first Hope Downs mines that Hancock Prospecting operates in a 50:50 joint venture with Rio Tinto began production in 2007, with operations at three other sites beginning in 2013.

The court will now have to determine how much is owed in royalties back pay for all those years of operation.

Sources close to Wright Prospecting estimate it will be in the range of $800-$900 million.

A spokesman for Wright Prospecting said the company was “pleased to finally receive a result in our favour”.

“The decision is lengthy and complex. We will review it in detail before determining if any further steps need to be taken,” he said.

DFD Rhodes, the family company of Lang Hancock’s other long-term business associate Don Rhodes, also had a partial win in claiming a portion of Hope Downs royalties based on a decades-old deal, which Wright Prospecting did not oppose.

Mr Newby said the royalties payable to DFD Rhodes amounted to about $4 million per annum and about $14 million per year for Wright Prospecting.

“Any amounts payable regarding royalties and interest to WPPL or Rhodes is a shared responsibility with our partner Rio Tinto, who have a further royalty contribution in this regard, which lessens HPPL’s contribution,” he said.

“We will consult with our partner and consider our position on these matters.”

Mr Newby said the judgment had also firmly rejected the “baseless” equity claims by not just Wright Prospecting but also by Mrs Rinehart’s two eldest children John Hancock and Bianca Rinehart.

The siblings had accused their billionaire mother of seeking to deny them a stake in Hope Downs that they argued their grandfather and company founder Lang Hancock bequeathed to them in a trust.

But they adopted their mother’s position in arguing Wright Prospecting had no interest.

John Hancock said he and his sister did not claim anything in the litigation, with their claims referred to private arbitration.

He said he wished the Wright and Bennett families well — and would attempt “reunification” with his own — “rather than continuing disagreements about the validity of agreements from the 1980s”.

He said the conflict had caused pain to all parties.

“I would much prefer to focus on the positive, and find a fair and reasonable way forward for the whole family ... and a return to the close family we had at various times in the last 50 years of my life,” Mr Hancock said.

“I hope we can finally put these events from decades ago behind us, and as a united family, celebrate and continue the contribution we have made to Australia.”

Matt Keady, chief executive of DFD Rhodes, said the judgment recognised Mr Rhodes’ contribution to the iron ore industry.

Asked about what it meant to his company, he responded “it means a win”, and described Hancock Prospecting as “a formidable opponent”.

Mr Hancock and Mr Wright, old school friends, formed their business partnership with a handshake back in the 1930s.

They went on to make some of the most significant geological discoveries in Australia’s history, inked a lucrative 2.5 per cent royalties deal with Rio Tinto in the 1960s and finally entered into a formal alliance in 1978.

It was not formal enough, however, and Mr Hancock — whose daughter Ms Rinehart is now Australia’s wealthiest person — predicted in 1982 that their vast network of Pilbara assets could become a legal minefield without more clarity.

Telling Mr Wright he did not want to “pass on the mess to the next generation”, he called for them to be divided “roughly in two equal parts”.

The men accordingly signed a deed in 1984, listing which assets went to Wright Prospecting and which went to Hancock Prospecting, but the court battles still ensued.

At trial, Hancock Prospecting argued Wright Prospecting had no right to Hope Downs given it played no role in the investment and operation of the projects.

“Over approximately four decades, John, Bianca, WPPL and DFD Rhodes took no risk and made no meaningful contribution to developing the Hope Downs and East Angelas iron ore mines and infrastructure,” Mr Newby said.

Wright Prospecting, run by Mr Wright’s daughter Angela Bennett, accepted the Hope Downs 1, 2 and 3 mines were on the list as Hancock Prospecting-owned assets.

But Hope Downs 4, 5 and 6 were a more complex matter.

They were not included in the list when it was drawn up as Mr Wright and Mr Hancock had lost the tenements in a dispute with the State Government.

Wright Prospecting successfully argued it was entitled to a 1.25 per cent royalty for all of Hope Downs.

That’s because the intention of the 1984 deed was that all assets kept paying royalties into the partnership, even when one party developed them alone.

Wright Prospecting further argued — unsuccessfully — that it was entitled to an equal 50 per cent ownership share in East Angelas, because at the time the list was compiled, it was an undivided partnership asset.

It’s highly likely Hancock Prospecting will challenge the royalty decision, first in the WA Court of Appeal then in the High Court, which is the nation’s highest.

Leonie Baldock and Alexandra Burt, the daughters of Ms Bennett’s late brother Michael, were part of the case, arguing Hancock Prospecting and Ms Rinehart had breached their duties as ongoing partners.

About 20 senior lawyers had appeared for parties in the case, but hundreds of solicitors had worked on it.