Experts grilled in Yindjibarndi, FMG row

Experts have disagreed on how to calculate royalties in the ongoing court action over the Yindjibarndi people’s claim for compensation from Fortescue’s Solomon hub operations.

The Yindjibarndi Aboriginal Corporation (YAC) launched legal action against the state of Western Australia and Andrew Forrest-led Fortescue Metals Group in the Federal Court’s Western Australian registry.

YAC claimed it is owed compensation from FMG over the company’s Solomon mine being operated on the Yindjibarndi people’s land in the Pilbara.

The action comes after the Federal Court ruled the Yindjibarndi people had exclusive rights to the Pilbara area where Fortescue's Solomon mine is located.

Before Federal Court judge Stephen Burley on Monday, mining economist Murray Meaton and Martin Hall were called as expert witnesses.

Mr Meaton told the court the average royalty calculation in Pilbara mining agreements was for the traditional owners to receive 0.5 per cent.

But Mr Meaton said in his calculation, the Yindjibarndi people should receive more than that.

“I believe that the industry, over 22 years, has decided that royalties are the most appropriate method for agreement making and I have been involved in more than 100 agreements all of which have involved some form of royalty,” he said in court.

“To the best of my knowledge, the Yindjibarndi people are the first case in the Pilbara where a group has been granted exclusive rights.

“This is a unique case… I remain convinced, 1 per cent royalty remain the appropriate basis in this case.”

Mr Hall, an expert engaged by Fortescue, told the court he disagreed with some aspects of Mr Meaton’s report.

“I’m looking at compensation for what they lost, Mr Meaton is looking at what they would’ve got if they struck an agreement,” he said.

“Those things are not the same.

“It would certainly be an area of disagreement because to my understanding, the Yindjibarndi people’s rights to the areas explicitly excludes rights to minerals.

“If the Yindjibarndi people had rights which included rights to minerals, then clearly the value of their rights would be a great deal higher and then I would anticipate they would have a very different negotiation process.”

The dispute between Yindjibarndi people and FMG had been long-running, with YAC also alleging the mining operation has created a division in the Aboriginal community in Roebourne.

A breakaway group of YAC, the Wirlu-Murra Yindjibarndi Aboriginal Corporation (WMYAC), was established in 2012.

The WMYAC claimed the YAC was not properly representing the interests of the Yindjibarndi people, and has backed the compensation offer from Fortescue.

In court, Mr Meaton said Fortescue wanted to get the Solomon hub developed and did not go through the usual tribunal process.

“I’m convinced they were able to influence a subset of smaller group to reach an early agreement and therefore they could avoid the full right to negotiate a process,” he said.

However, Mr Hall told the court even a month’s delay would be significant to a miner.

“There’s value for miner to start earlier, they have a strong incentive to strike a deal,” he said.

“They don’t care if the land’s worth $100,000…when the mining rights might be worth millions and billions. It’s all about the value of the mining project and avoiding delay.”

The Federal Court hearing is scheduled to continue for the rest of April.