A 40-year-old letter shows prospectors Lang Hancock and Peter Wright remained committed to sharing a portion of billions of dollars in royalties from their iron ore discoveries with another pioneering prospector, the West Australian Supreme Court has been told.
The high-stakes civil case to retrieve billions of dollars in iron ore royalties from Hancock’s daughter Gina Rinehart been dominated by testimony supporting the claim of Wright's descendants, but this week the family of often-forgotten prospector Don Rhodes outlined their claim to the court.
Mining pioneers Don Rhodes (inset), Peter Wright and Lang Hancock.Credit: WAtoday
Wright Prospecting claims the Hope Downs tenement, discovered by the school friends-turned-business partners Hancock and Wright, and home to four operational mines owned by Rinehart’s Hancock Prospecting and Rio Tinto, was held jointly under a 1980s partnership deed.
However, Rhodes’ family company, DFD Rhodes, insists the critical role Rhodes played in discovering the mammoth iron ore deposit entitled him to a 1.25 per cent stake in its proceeds.
The Rhodes’ lawyer, Jeremy Stoljar SC, told the court that deal was done as part of a 1969 agreement the case between Hancock and Wright also hinges on.
Another letter tendered to the court, to DFD Rhodes by the Hanwright partnership’s solicitors in late 1984, underlined its commitment to the deal, the court heard.
In it, the solicitors referenced Rhodes’ 55 per cent interest in a temporary reserve he had agreed to allow Hanwright to mine exclusively. The reserve now intersects with the lucrative Hope Downs mine.
Stoljar told the court the 1984 letter was written ahead of changes Hancock and Wright were making to the partnership, assuring Rhodes his royalty rights on iron ore produced from the site would be protected by the 1969 agreement.
“By this time, it can be easy for one to overlook how much time has gone by – 25 years have passed since the 1969 agreement,” Stoljar said.
“Our proposition is that they are expressly saying the temporary reserve is subject to the 1969 agreement, which is of course what we say.
“This is what the Hanwright partnership believed for 25 years, although it seems to have changed its position more recently.
“It’s a proposition entirely at odds with the proposition [Hancock Prospecting] advances in this case, but as we see it, an entirely correct proposition.”
A 1970s agreement drawn up by Hancock and Wright during their search for a joint venture partner to develop Hope Downs also disclosed their royalty obligations to Rhodes under the 1969 deal, the court heard.
Tuesday's evidence comes after Stoljar told the court Hancock had attempted to downplay Rhodes’ role in the discovery, to Rhodes’ frustration, before later crediting him with fathering the manganese export industry in WA.
Rhodes, who owned an earthmoving business with a 300-strong workforce operating across WA, had a keen interest in exploration and mining. He founded a manganese mine in Woodie Woodie and an export operation in Port Hedland.
His contribution to the industry garnered him the respect of Hancock, who went on to work with him over several decades and penned a letter stating there was no man in the state more deserving of a royalty deal.
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 Tuesday’s submissions.
The case continues.
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