Court documents in the civil case over the royalties of Hancock Prospecting’s iron ore mines show disputed assets were worth about $840m when valuations were made decades ago.
Wright Prospecting lawyer Julie Taylor SC has been presenting her opening address to the Western Australian Supreme Court since the legal battle officially got underway on Monday.
On Wednesday she had concluded covering the history of Hancock and Wright partnership agreements all the way up to 2005 – years after the deaths of the founders of both companies.
Ms Taylor presented documents showing a 1998 facilitation agreement Hancock Prospecting Pty Ltd had undertaken with South African company Iscor – now ArcelorMittal, under the Kumba Group.
The documents suggest Hancock was interested in developing three of its six iron ore tenements in the area near Newman known as Hope Downs – specifically Hope Downs 1, 2, and 3, excluding the East Angeles tenements, Hope Downs 4, 5, and 6.
A 2002 feasibility study was then presented, which assumed new rail and port facilities would be constructed nearby, giving the project a net present value of $840m, with an internal rate of return of 15.9 per cent, and ongoing residual value.
“At February 2002, this was going to be an extremely valuable project,” Ms Taylor told the court.
She has been presenting documents and correspondence to the court to show both Hancock and Wright continued to act as if both prospecting entities were in a partnership, even after the 1985 death of Peter Wright and 1992 death of Lang Hancock.
The case centres around Hancock’s Hope Downs royalties, and alleged agreements made with other mining entities which they claim entitles them to a share of those royalties.
Shortly before lunch on Wednesday, Wright lawyer John Rowland began his opening statements to the court.
Wright’s statements are expected to run into next week, when lawyers for Hancock Prospecting will get their turn to make opening statements.
It’s understood the case involves some 15,000 documents overall.
On Tuesday it was revealed in court a meeting was held between Lang Hancock and the children of his late business partner Peter Wright, six weeks after Mr Wright’s death in September of 1985.
Attending the meeting were Mr Wright’s son Michael, who died in 2012, and Angela Bennett, the billionaire heiress to the Wright estate who is represented in the current civil case.
Michael Wright had recorded the meeting, and parts of the transcript were read out in court.
Ms Taylor used references to Hopes Downs tenements 4,5, and 6 – called the East Angelas at the time of the meeting – and pointed to Mr Lang’s comments like “we have only just got the Angelas,” and “I believe I can hold the Angelas for us for quite some time,” as evidence Lang and Wright were working together as a partnership.
“This transcript is an extremely important contemporaneous record that both parts of Hope Downs would be kept by the partnership and it would be [Hancock] leading the charge in relation to these areas,“ Ms Taylor told the court.
The legal battle, predicted to run into November at the earliest, began on Monday in Western Australia’s Supreme Court.
The civil case involves a number of parties claiming a stake in iron ore royalties from a series of six tenements in WA’s Pilbara, near Newman, part-owned by Hancock Prospecting Pty Ltd.
The key entity in the case is Wright Prospecting Pty Ltd, but also involves the two eldest children of Hancock executive chairman Gina Rinehart, the surviving children of Wright founder Peter Wright, the estate of DFD Rhodes Prospecting, and mining giant Rio Tinto.
Gina Rinehart, 69, is Australia’s richest woman, and is embroiled in her own bitter legal dispute over the Hancock family trust with her eldest children John Hancock and Bianca Rinehart – who also have their lawyers present.
The case continues.