Hancock forced to cede Rhodes Ridge
Orders made by the Supreme Court of Western Australia on Wednesday end a more than decade-long feud over the intentions of the late Pilbara visionaries and friends Lang Hancock and Peter Wright.
The ageing miners divided their partnership assets in a 1984 agreement in the hopes of preventing litigation between their children.
Under the 1984 agreement, Wright was given the option to take Hancock's half of their 50 per cent interest in the undeveloped iron ore deposit.
But Hancock has fought to retain its share over Rhodes Ridge, a high grade iron ore deposit, which has been forecast to be worth billions once developed.
Hancock's lawyers appealed against a 2010 Supreme Court decision, which ruled that it must honour the 1984 agreement.
Its lawyers had argued that subsequent agreements made to enable Hancock to help Wright's children develop Rhodes Ridge after his death had brought the asset back into the partnership.
When Mr Hancock died in 1992, he had been unsuccessful in developing Rhodes Ridge, and in 1997, the Wright family moved to reclaim Hancock's 25 per cent.
Hancock lost the appeal to retain its share in October last year but moved to have at least four of the draft orders following the decision amended.
On Wednesday, the final orders were made obliging Hancock to do everything practicable to enable the transfer of Hancock's 25 per cent interest to Wright.
"[Hancock Prospecting] is obliged to do all things necessary (including executing documentation and joining in the seeking of the consent of any minister or joint venture party which may be necessary) to enable [Wright Prospecting] to have the benefit of the right to assume sole control over and responsibility for the administration, development and disposal of the Rhodes Ridge interest," the orders read.
No timeline has been set for the transfer and it is not yet clear what the Wrights are intending to do with the asset.
Rio Tinto holds the remaining 50 per cent of Rhodes Ridge, which was never under dispute.
A spokesman for Wright Prospecting said the company welcomed the final orders.
"Throughout this matter and the previous matter in the Supreme Court, Wright Prospecting's focus has been to enforce and protect its ownership of 50 per cent of the Rhodes Ridge joint venture," the spokesman said.
Frequently Asked Questions about this Article…
The Supreme Court ordered Hancock Prospecting to hand over its 25% interest in the Rhodes Ridge iron ore deposit to Wright Prospecting and to do everything practicable (including executing documentation and seeking any required consents) to enable that transfer and allow Wright to assume sole control over administration, development and disposal of the interest.
Following the orders, Wright Prospecting is to receive Hancock Prospecting's 25% interest, while Rio Tinto continues to hold the other 50% of the Rhodes Ridge joint venture — Rio's stake was never disputed in the litigation.
The dispute stems from a 1984 agreement between Lang Hancock and Peter Wright that divided partnership assets and gave Wright an option to take Hancock's half of their shared 50% interest. After Lang Hancock died in 1992 and subsequent arrangements, the Wright family moved to reclaim Hancock's 25% in 1997, leading to more than a decade of legal battles over the parties' intentions and rights under the 1984 agreement.
Rhodes Ridge is described in the article as a high-grade iron ore deposit in the Pilbara that has been forecast to be worth billions of dollars once developed. Its potential value matters because ownership and development decisions could materially affect the future value of the joint venture interests.
Yes. Hancock Prospecting appealed a 2010 Supreme Court decision that it must honour the 1984 agreement and lost. It also lost a further appeal in October of the previous year and sought amendments to several draft orders; the final orders compelling the transfer were made by the court on Wednesday.
No timeline has been set for the transfer. The court ordered Hancock to take all practical steps to enable the transfer, but the article notes there is currently no schedule for when the handover will be completed.
A spokesman for Wright Prospecting welcomed the final orders, saying the company’s focus throughout the proceedings has been to enforce and protect its ownership of 50% of the Rhodes Ridge joint venture (as a result of obtaining Hancock’s 25% interest).
Based on the article, investors should watch for formal completion of the transfer of Hancock’s 25% interest to Wright Prospecting, any announcements from Wright about development or disposal plans, and any required ministerial or joint-venture consents — the article makes clear those steps are necessary but that Wright’s intentions and a timeline are not yet public.
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