Royalty dispute between Rio Tinto and traditional owners of Yandicoogina iron ore mine set to drag on
A traditional owner group at the centre of an iron ore royalty underpayment dispute with Rio Tinto have rejected the mining giant’s latest settlement offer.
A traditional owner group at the centre of an iron ore royalty underpayment dispute with Rio Tinto have rejected the mining giant’s latest settlement offer, as Rio Tinto chief executive Jakob Stausholm agreed to meet with community leaders to discuss the impasse.
Mr Stausholm told Rio’s Melbourne annual shareholder meeting he hoped to meet with elders from the Gumala people to discuss the underpayment dispute, after Gumala Aboriginal Corporation (GAC) chief executive Justin Dhu asked the Rio boss at the meeting why a major underpayments dispute was still not resolved almost two years since it was first identified by Rio.
It was Rio that raised the underpayments under the land use agreement covering the rich Yandicoogina mine in mid-2020, sending a $40m cheque to GAC to cover underpayments under the agreement spanning “a number of years”.
Since then Rio and GAC have been locked in a dispute over the size of the underpayments, with Rio’s last offer believed to be worth about $150m. While GAC is understood to believe it is owed more than Rio’s current offer, the transparency of Rio’s calculations underpinning the payments is also a key factor in the dispute.
GAC has long expressed concerns about the transparency of Rio’s royalty calculations under the 25-year old agreement. They are paid on a complex formula based on the ground disturbance at the mine and its surrounding area – with some adjustments for the iron ore price – rather than being a simple royalty agreement in which payments are made on the basis of tonnes of iron ore extracted and sold.
It is understood that the GAC board rejected Rio’s most recent offer on Thursday afternoon, and are hoping talks with Mr Stausholm, due to visit WA this week, will help resolve the impasse.
“I’m going back to Perth tonight and I hope to meet with your elders in the next couple of days. Because I can assure you there‘s nothing we would like more than making new agreements – specifically in this case,” he said.
“I‘m aware that there are some commercial outstandings, which is regrettable, and you should be aware we’re very, very keen on finding a commercial solution on that.”
Mr Stausholm told reporters after the shareholder meeting Rio was working hard to resolve the outstanding disputes remaining with traditional owner groups, as the company tries to reset its relationships and rebuild trust in the wake of the destruction of ancient heritage sites at Juukan Gorge in May 2020.
“I think I was pretty clear, even a year ago, in saying we don’t work towards timelines here, because it is about rebuilding relationships. You cannot impose a timeline on others,” he said.
“We‘re rational business people – I would love to have a timetable and say ’done, done, done’, but it just doesn’t work like that. But I can assure you, we are putting all our effort into it.”
More Coverage
