Fortescue faces $1bn compo costs in Solomon mine case
Andrew Forrest and Fortescue Metals Group have refused to cut a royalty deal with the Yindjibarndi people for more than a decade. That decision could cost the miner $1bn.
The blockbuster legal case between Andrew Forrest’s Fortescue Metals Group and the traditional owners of land underlying one of the company’s richest mines has kicked off, with lawyers for the Yindjibarndi people arguing Fortescue should be forced to pay up to $1bn in royalties and compensation for damage to cultural sites.
Fortescue has been operating the mining hub at Solomon in Western Australia since 2013, running at a rate of 60 to 70 million tonnes of iron ore a year over the last decade.
The mine has never had a compensation deal with the Yindjibarndi Aboriginal Corporation (YAC), which brought the current case on behalf of traditional owners, despite the group filing their native title claim as early as 2003 – well before Fortescue pegged the tenements underlying the Solomon mining hub. The exclusive native title claim was eventually granted in 2017.
The hearings are being held in Roebourne’s Fifty Cent Hall, which is normally used as a youth centre but was also the first site of failed negotiations between Fortescue founder Andrew Forrest and Yindjibarndi Aboriginal Corporation chief executive Michael Woodley more than 15 years ago.
Not all of Solomon’s iron ore has come from lands covered by the Yindjibarndi native title claim, but counsel for the Yindjibarndi people, Vance Hughston, told the Federal Court on Monday the claim included an estimate that traditional owners would have been paid at least $340m in royalties for iron ore sold so far if an agreement similar to those of other mining companies had been signed, and would be entitled to another $100m based on the current mine life of the Fortescue operations.
The Yindjibarndi claim is also believed to include interest payments, taking the total up to around $500m for economic losses by the native title owners.
The case could also leave the economic compensation to the WA government, based on uncertainties within the wording of both the federal Native Title Act and WA’s mining laws. And the size of the total claim against Fortescue could double, with Mr Hughston also arguing YAC and its members are entitled to compensation for cultural and spiritual loss, as well as for economic losses.
Mr Hughston told the Federal Court Fortescue’s mining and exploration activities had affected about 250 significant heritage and cultural sites, and YAC members were entitled to “fair and just” compensation for the damage – particularly given they had not given Fortescue the right to mine on land to which they held exclusive native title.
That aspect of the claim could double the amount at stake for Fortescue, to a figure closer to $1bn. Mr Hughston told the court the High Court had already set a precedent for the claim in its 2019 Timber Creek decision that awarded the Ngaliwurru and Nungali people compensation for the damage to cultural sites as well as for economic losses.
Fortescue has fought the Yindjibarndi claim in the Federal Court since 2014, and exhausted its legal appeals in 2020 when the High Court rejected Fortescue’s application to appeal a 2019 order to negotiate a compensation deal. YAC filed a request for the Federal Court to adjudicate the claim in 2022 after lengthy negotiations failed to deliver a deal.
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