Dynasties face off on royalty cash
IT was a battle of dynasties when a case regarding billions in royalty payments landed in the Supreme Court this week.
Gina Rinehart's Hancock Prospecting fought off a demand that Wright Prospecting be paid 1.25% of coal royalties - $1 billion over three decades.
The challengers gave the Hancock firm rights to the Galilee Basin's Kevin's Corner mine site in 1998.
It is now owned by Indian resources giant GVK and the future site of a $6.6 billion mining project.
More than 4500 workers will be needed to build and operate the project if it is eventually approved.
Ms Rinehart's father Lang Hancock and Wright Prospecting founder Peter Wright pioneered the lucrative iron-ore industries in Australia as great mates. Under this partnership, they owned Kevin's Corner.
However, each of the groups were now in regular courtroom skirmishes that intensified after a court in 2010 ordered Ms Rinehart to give 25% of her Rhodes Ridge iron-ore project in Western Australia to the Wright heirs.
Court documents showed contracts signed between Wright and Hancock in the 1980s agreed to give each party 1.25% of coal value royalties if a mine was ever developed on the Queensland site.
If GVK made good on its plan to export 30 million tonnes of heating coal for three decades from Kevin's Corner - and based on a price of A$90 per tonne - that percentage would amount to more than $33 million in royalties per year. In total, it would deliver $1.012 billion to the Wright company by the time the mine was exhausted. In the Supreme Court on Monday, these claims were struck out. It did maintain that the mine was a Hancock interest free of Wright's demand for royalties.
However, Justice Margaret McMurdo would not dismiss the entire case on Monday. She described the dispute as "long-standing and complex".
Wright Prospecting may launch another case, but it will have to rely on new claims.
Both parties declined to comment on the case.