Western Australia court orders Hancock, Rio Tinto royalties in Hope Downs dispute

Hancock Prospecting and Rio Tinto were ordered to pay royalties from the Hope Downs iron ore complex, a ruling that could ultimately redirect hundreds of millions of dollars from one of Australia’s most valuable mining hubs to the descendants of two long-dead partners.

Justice Jennifer Smith of the Western Australian Supreme Court found that Wright Prospecting and DFD Rhodes should receive past and future royalties from some Hope Downs mines. The case has run for 15 years, but the dispute itself reaches back far further, into a 1969 agreement tied to Lang Hancock, his former classmate Peter Wright and businessman Don Rhodes.

The court summary said the proceedings involved claims in contract and equity over iron ore sold and produced from Hope Downs mines jointly owned and operated by subsidiaries of Hancock Prospecting Pty Ltd and Rio Tinto Ltd. It also covered Wright Prospecting’s separate claim to a 50% proprietary interest and a share of profits from parts of the project that include former East Angelas exploration licences.

Smith dismissed ownership-share claims but upheld royalty liability, preserving Hancock Prospecting’s 50% ownership of Hope Downs while leaving open the financial consequences of the ruling. The exact amount will be set later, but a company-side estimate cited in the dispute put annual royalties at about A$4 million for Rhodes’ descendants and about A$14 million for Wright Prospecting.

The judgment drew on a vast record. The court said the factual history stretched from 1967 to 2005, more than 4,000 contemporaneous documents were tendered, and the trial lasted 51 days. Smith had to construe the 1969 agreement alongside later partnership agreements made in 1983, 1984 and 1987, all against the backdrop of the long development of Hope Downs and the approvals, financing and construction needed to bring it into production.

Wright Prospecting said it was pleased after years of delay and would review the lengthy judgment before deciding whether to take further steps. Rio Tinto said it acknowledged the decision and would consider it in detail. Hancock Prospecting’s executive director, Jay Newby, argued that bringing Hope Downs to life required major exploration, evaluation and development spending, thousands of government approvals and major financing. John Hancock said he hoped the ruling would help the family move past decades-old events and reunite.

The decision is a reminder that old mineral agreements can still reshape modern resource profits. In the Pilbara, where giant ore bodies can generate cash for decades, the legal weight of a promise made in 1969 still proved powerful enough to reach into today’s earnings.