Mining event of the year kicks off in court 42

It's in court 42 of the Supreme Court of Western Australia that 27 of the most highly paid lawyers in Australia have started arguing over events which occurred as far back as the 1950s leading to the discovery of the iron ore deposits which form the backbone of the world's two biggest mining companies, BHP and Rio Tinto.Officially, the case is a clash of two families. The descendants of the late Lang Hancock and his best friend from their days at Perth's exclusive Hale School, Peter Wright.Best known of the second generation of the Hancock and Wright families (who once traded jointly as Hanwright) is Gina Rinehart, the only child of Hancock who today is said by Forbes, a US business magazine, to have a personal fortune of US$27.6 billion.If correct, that valuation makes Rinehart Australia's richest women and the 57th richest person in the world but unfortunately for her there are a lot of people who want a slice of her wealth which flows from direct investment in iron ore mining and a royalty stream -- and is almost certainly a significant undervaluation.What no-one outside the mining industry values, because it's too hard for some people to understand, is that Rinehart also controls a vast amount of exploration acreage in the heart of Australia's mineral-rich Pilbara region.It's in Australia's outback that Rinehart has a list of possible future mines which have been worked up to a feasibility stage and are waiting in the wings for a market opportunity. They might not be producing today but the ore deposits have very real value.Before Rinehart can develop more mines to join her part-owned Roy Hill and Hope Downs projects, she will need to clean up the baggage of history left by her late father that forms the basis of the current court case which has taken decades to start and which is scheduled to run until at least November.DisputeAt the heart of the dispute, which is costing $170,000 a day in legal fees alone, is the question of whether Rinehart inherited all of the Hope Downs ore deposits or whether the Wright family has a half interest.Spicing up that question is a royalty claim by the family of the late a Don Rhodes, a former prospector for Hanwright, and claims by two of Rinehart's four children that they have a direct claim to the revenue flowing from Hope Downs.Rio Tinto will be watching the case particularly closely because it is half-owner and operator of the Hope Downs project which has its ore blended with material from other Rio Tinto mines.What's happened in the first few days of the case has largely been a trip down memory lane with lawyers for the Wright family (trading as Wright Prospecting) producing documents which purport to show that the Hanwright founders wanted to keep everything on a 50/50 basis.That claim will undoubtedly be challenged by Rinehart's lawyers when they make their opening remarks over a week set aside for their preliminary statement.More than 1500 documents have been submitted to the court, including old prospecting maps and correspondence between Lang Hancock and Peter Wright.LegacyBoth men would be appalled about the way their legacies have become a lawyers picnic though that cliché doesn't probably cover the magnitude of the situation because there are enough lawyers to hold a cricket match (with five substitutes on the boundary).Lang Hancock would not be amused by what's happening. He had a particular disdain for lawyers, almost as much as he had for politicians, though he did have a softer side for journalists having started two newspapers to push his strident views.One of his plans was to create a deepwater port using a nuclear device for which he consulted Edward Teller, father of the hydrogen bomb, who worked closely of J. Robert Oppenheimer on the Manhattan Project which created the atom bomb.Whatever the less realistic side of Hancock he was undoubtedly a man with a vision and he fought to see the first stage of that vision delivered through a partnership with Rio Tinto that his daughter has continued.For the next five months court 42 will be a hotbed of claim and counterclaim as players in the game demand a slice of the world's richest iron ore pie and while a result is impossible to predict it can be said with some confidence that this is just the first step in a long-running process that is likely to continue through appeals and counter appeals.

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