Lawyers for the company of late prospector Don Rhodes have sought to correct the record on the discovery of a lucrative iron ore deposit in Western Australia’s Pilbara region, telling the court mining magnate Lang Hancock downplayed Rhodes’ role in the find to exaggerate his own.
But letters exchanged in 1970 indicate Hancock believed there to be “no man in Western Australia more deserving” of a slice of the royalties now flowing out of the mines set up at Hope Downs.
Mining pioneers Don Rhodes (inset), Peter Wright and Lang Hancock.Credit: WAtoday
The claim came on day six of a Supreme Court civil trial in which the descendants of mining mogul Peter Wright – Hancock’s former business partner – are waging a legal battle against Australia’s richest person and Hancock’s daughter, Gina Rinehart, to claim half of the royalties from ore mined at Hope Downs.
Wright Prospecting claims the tenement, discovered by the school friends-turned-business partners and now home to four operational mines, was held jointly under a 1980s partnership deed.
But the earthmoving entity Rhodes once helmed, DFD Rhodes, claims the often-forgotten prospector played a critical role in discovering the asset and was guaranteed a 1.25 per cent stake in the mammoth deposit, which Hancock now mines alongside Rio Tinto, under a 1969 agreement.
DFD Rhodes’ lawyer Jeremy Stoljar, SC, spent Monday poring over the history of Rhodes’ work in WA’s mining heartland, operating a business with a 300-strong workforce across operations in Port Hedland, Welshpool and Esperance.
But he also had a keen interest in the resources sector, engaging in exploration and mining operations, including a manganese mine in Woodie Woodie and an export operation in Port Hedland.
And his contribution to the industry garnered him the respect of Hancock, who in a letter shared with the court described Rhodes as having single-handedly fathered the manganese export industry in WA and breathing life into the state’s iron ore nexus.
From at least the 1950s, the court was told Rhodes, who held rights over various mining reserves, held a close and co-operative relationship with the HanWright partners, particularly Hancock.
And their common interest in swathes of WA’s iron ore heartland saw them join forces in the mid-1960s, an arrangement Stoljar said was cemented in the 1969 partnership deal their case for a slice of the profits now hinges on.
In it, Rhodes agreed to allow the HanWright partnership to utilise land he held rights to, portions of which now form part of the sprawling Hope Downs tenement, in exchange for a 1.25 per cent royalty on the iron ore sold.
Despite ceding control, Stoljar told the court Rhodes and HanWright worked in tandem, with Rhodes making his staff and equipment available to assist in the exploration of the site.
But an attempt to document how that business partnership came to be in May 1972 sparked conflict, with Rhodes accusing Hancock of emphasising his own role in the discovery while downplaying that of others in a letter now tendered as evidence.
“If it’s going to be a history, let’s state that Rhodes did some work there, not just HanWright,” Rhodes told Hancock.
Hancock later conceded he had “shot his mouth off”, saying things that had quite possibly gotten some off centre.
But Hancock claimed he had done nothing but praise the successful businessman, telling Rhodes he had taken his success story to none other than the prime minister.
And that was evidenced by a letter Hancock penned in 1970, in which he contemplated the royalties Rhodes should receive on tenements he handed over to the partnership to pursue.
“You’ll appreciate there are limits to the commitments two men can make, but in the case of Don Rhodes, he will receive a total payment of $1 million and continuing royalty of 1.25 per cent,” Hancock said.
“It is true that there is no man in Western Australia more deserving, given the unsung work he has done … and being solely responsible for the development of the [state’s] manganese industry.”
Hancock, Wright and Rhodes had held crisis talks and documented the history of their efforts to stave off an impending confiscation bid by the government.
The court was told the parties feared they had reached a “saturation point”, with a “wall of tenements” and a stronghold in the Pilbara that may draw the ire of the then-Court government and stifle future bids to get their hands on more reserves.
Hancock Prospecting and its executive chair Rinehart maintain the Hope Downs assets and royalties belong to them, insisting they put in the work to recover them and invest in their development after they were confiscated by the state government.
They have not had an opportunity to respond to Monday’s submissions.
The case continues.
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