Rinehart legal battle: Lang Hancock letter ‘showed Wright entitled to half’

An explosive letter written almost 40 years ago has been produced as evidence in a bitter battle between Gina Rinehart and the family of her father’s former business partner.

Mining billionaire Gina Rinehart.

Gina Rinehart was told by her father almost 40 years ago that his co-founder’s family were entitled to a share of the valuable Pilbara iron ore assets now at the centre of a bitter legal dispute.

A letter from Pilbara iron ore pioneer Lang Hancock to his daughter Mrs Rinehart, dated 20 February 1986 and produced as evidence in Western Australia’s Supreme Court on Tuesday, set out how their family’s Hancock Prospecting only held a half share in the East Angelas deposits.

Wright Prospecting or WPPL – the business set up by Mr Hancock’s business partner Peter Wright – is suing Hancock Prospecting, or HPPL, claiming it is entitled to a half share in the multibillion-dollar East Angelas deposits as well as hundreds of millions of dollars in royalties they claim they are owed from the Hope Downs iron ore project.

Julie Taylor SC, representing WPPL, told the court the letter was an important part of their case.

“In our submission, this is very significant evidence that both Lang and also Mrs Rinehart knew and understood that all of those areas were held jointly for the partnership … HPPL was only entitled at most to half,” she said.

“Mrs Rinehart has known at least since February 1986 that these assets are held jointly with the partnership.”

Mining magnate Lang Hancock with daughter Gina.

She also noted that the letter was not discovered by WPPL during the discovery process.

Instead, the document emerged during the discovery process from the dispute between Mrs Rinehart’s Hancock and two of her children, John Hancock and Bianca Rinehart.

The siblings were pulled into the case by Wright Prospecting, and Hancock and Mrs Rinehart have fought unsuccessfully to have elements of the case kept confidential given the ongoing arbitration process between the iron ore magnate and those two offspring in a separate dispute.

Among the numerous other historical documents mentioned in court on Tuesday was the transcript of a conversation between Lang Hancock and Mr Wright’s son Michael Wright shortly after Mr Wright’s death.

Michael Wright, Ms Taylor said, had a habit of recording his meetings and having them transcribed and the document was an “extremely important contemporaneous record” of Lang Hancock’s position at the time.

Michael Wright, son of late mining magnate Peter, outside the Supreme Court in Perth.

Under an agreement between Lang Hancock and Peter Wright, whoever outlived the other would take the lead in developing their shared assets on behalf of their joint partnership, and Ms Taylor said the transcript of the meeting clearly showed Lang Hancock’s understanding that the East Angelas assets were jointly held by the two families through that partnership.

In one of those conversations, Ms Taylor said Mr Hancock asked Michael Wright if he had “any ideas about what you wanted to do” with the East Angelas deposit and his thoughts about starting a mine in “areas that belong to us both” – statements she said “plainly indicated” that the East Angelas deposits were an asset of the Hancock-Wright partnership.

The East Angelas deposits were identified early on by Mr Hancock and Mr Wright, but they were stripped of the project in the 1960s amid concerns from the state government about their ability to deliver a steel mill.

Gina Rinehart and Lang Hancock in an image from the ABC's Australian Story. Picture: Supplied

The pair were then involved in an intense lobbying campaign that saw the deposits ultimately returned by the 1980s, although whether they were returned to the Hancock-Wright partnership or only to Hancock is now being determined by the court.

Ms Taylor produced documents showing that the application for an exploration licence at the time of the return of East Angelas was made by a geologist of the Hancock-Wright partnership on the letterhead of the partnership.

Both Wright and Hancock already enjoy collect huge amounts of iron ore royalties each year, with Mrs Rinehart ranking as Australia’s richest person and the Wright descendants – his daughter Angela Bennett and his grandchildren Leonie Baldock and Alexandra Burt – all worth billions.

Ms Taylor has spent the first two days of the trial walking the court through hundreds of historical documents and correspondence, tracing the history of the assets and their at-times convoluted ownership structures.

Mr Hancock and Mr Wright tried in the 1980s to carve up their assets in the hope of avoiding the sort of legal battles now playing out in WA’s Supreme Court. No less than 30 lawyers have packed out WA’s largest courtroom this week for the start of what is expected to be a marathon three-month trial.