Cazaly loses second legal battle to Rio

Leederville-based Cazaly Resources has failed to wrest control of the Rhodes Ridge tenements, which contain billion of dollars of iron ore, from mining giant Rio Tinto.

Late on Friday afternoon, the Perth's Warden Court rejected Cazaly's claim that Rio and joint venture partners, Gina Rinehart's Hancock Prospecting and Wright Prospecting, had failed to renew its rights for the Pilbara tenements.

Cazaly had also argued that Rio and its partners had made no moves to development the tenements in the past 35 years, which Rio disputed, saying it had built a fully equipped accommodation camp.

Warden Graeme Calder said on Friday that Rio and its project partners hold ownership of the tenements, which contains an iron ore deposit reported to be worth $US197 billion.

However the Warden found that Cazaly could still apply for exploration licences over the tenements however that may be pointless given the State Agreement between the government and Rio.

A Cazaly spokesperson told WA Business News the company will not comment until a legal review of the judgement is completed.

Last year, Cazaly announced it had teamed up with Fortescue Metals Group to jointly develop the Rhodes Ridge project should Cazaly get ownership of the tenements.

It is the second legal battle Cazaly has lost against Rio Tinto when in 2007, the High Court ruled in favour of the miner over the Shovelanna iron ore deposit.