Mine magnate and children in court feud for control of £2.5bn trust

LAWYERS for Australia’s richest woman and three of her children began arguments yesterday over who should control a £2.5 billion trust, in a bitter family feud that has captivated the country.

Justice Paul Brereton, of the New South Wales Supreme Court, reserved a decision on whether the case against mining magnate Gina Rinehart should be thrown out of court or argued fully. A decision is not expected for some days.

At stake is Ms Rinehart’s position as the sole trustee of the trust that holds a near one-quarter share in Hancock Prospecting, one of the world’s largest privately-owned mining companies. Lawyers for Ms Rinehart and her daughter Ginia Rinehart, the only child to side with her mother in the feud, sought to have the suit brought by the three elder children to remove their mother as a trustee thrown out of court.

Hancock Prospecting is developing what would be Australia’s fourth-largest iron ore mine and generates hundreds of millions of dollars a year in royalties from claims secured by Gina Rinehart’s father, Lang Hancock, a legendary figure in Australian mining history.

The dispute has already caused a delay at Hancock’s flagship Roy Hill iron ore mine, in Western Australia, which is now running into some stiff headwinds from slowing Chinese demand and soaring costs. A halving in iron ore prices over the past year has also dented the 58-year-old widow’s fortune, estimated by Forbes in February at about £11bn.

Ms Rinehart has been putting some of her vast wealth to work with purchases of media companies Fairfax Media and Ten Network Holdings in the past year, causing some consternation among the chattering classes.

Her opposition to taxes and calls for miners to be allowed exemptions from laws restricting the use of foreign labour have also put her on a collision course with government and unions.

Recently, Ms Rinehart warned Australia was becoming too expensive for mining firms which she said could hire workers for under $2 a day in Africa.

Ms Rinehart has a long history of controversy and has played out much of her life in the media spotlight.

She is the only child of Mr Hancock, a larger-than-life character credited with discovering the world’s largest deposit of iron ore in Pilbara, Western Australia. She is known as the Pilbara Princess.

Ms Rinehart learned the business at her father’s knee and, after a prolonged battle with his third wife following Mr Hancock’s death in 1992, gained control of Hancock Prospecting.

Ms Rinehart owns three-quarters of Hancock Prospecting and is the sole trustee of the family trust which holds a further 23 per cent of the company for the benefit of her four children.

Last year, just days before the trust was due to vest control, Ms Rinehart changed the date to 2068 and sought changes in the trust documents, prompting her three eldest children – Hope Rinehart Welker, Bianca Rinehart and John Hancock – to fight to have her removed as trustee.

E-mails earlier made public, after Ms Rinehart’s efforts to keep the case behind closed doors showed Ms Rinehart told the children the vesting of the trust would be likely to trigger crippling capital gains tax liabilities for them.

She also described the elder trio of children as being lazy and spoilt, and warned that their security would be at risk if they persisted with the action.