12/07/2005 - 22:00

Many players in iron ore history

12/07/2005 - 22:00


Save articles for future reference.

Long-time business partners Lang Hancock and Peter Wright could never have foreseen the fallout from their Pilbara iron ore venture. Joe Poprzeczny reports.

Many players in iron ore history

Long-time business partners Lang Hancock and Peter Wright could never have foreseen the fallout from their Pilbara iron ore venture. Joe Poprzeczny reports.


Three years ago, Liberal leader Colin Barnett rose in parliament to commend the late Lang Hancock (1909-92) for having so avidly and successfully publicised the Pilbara’s potential.

“On behalf of the Liberal Party on this 50th anniversary of that discovery, I wish to acknowledge and pay respect to the achievements of Lang Hancock as a great Australian, a great Western Australian and a pioneer and founder of the WA iron ore industry,” Mr Barnett said.

“Although iron ore had been identified in the Pilbara as long ago as the 1890s, it was in 1952 that Lang Hancock discovered the extent of the iron ore deposits.”

The high praise prompted one Labor MP to interject, and he was later followed by several others who publicly slammed the man dubbed ‘Rogue Bull’ for some of his non-mining eccentricities and less discreet outbursts.

But what could not be taken from the often cash-starved North West pastoralist, who commuted to Perth by private aeroplane, was that he had single-mindedly promoted the Pilbara from the mid-1950s, thereby helping ensure it became an iron ore mining province of international dimensions, and one providing ongoing opportunities for his daughter, Gina Rinehart.

“Although there may always be dispute about who discovered what and who played the dominant role, there is no doubt that Lang Hancock, through the observation that he made 50 years ago, brought about the development of the iron ore industry in this state,” Mr Barnett continued.

“It did not happen quickly. It took from 1952 until 1966 before the iron ore industry started its great expansion.

“From 1953 to 1960 Lang Hancock led the charge to lobby the federal government to lift the embargo on iron ore exports that had been imposed because it was thought that Australia was short of iron ore.

“In 1960 he succeeded and that embargo was lifted. The following year an embargo under state law was lifted that had prevented the pegging of iron ore deposits in WA.”

Mr Barnett had chosen his words carefully because he’s fully aware that there are some who dispute whether Mr Hancock deserves the degree of acclaim he so often attracted.

Some hasten to point out that Mr Hancock and his close and trusted partner, the late Peter Wright, established their own weekend newspaper, The Independent, in which the former was heavily promoted as having virtually single-handedly opened the Pilbara to the world.

WA Business News doesn’t wish to buy into that debate.

Hopefully a day comes when his role will be put into its correct historical context. But that will only come after the Hancock and Wright families, and mining giant Rio Tinto, allow historians to access their archives.

However, when that occurs the role of the late Stan Hilditch and Charles Warman, two overlooked Pilbara mining pioneers, will need to be reassessed and measured against Mr Hancock’s role and achievements.

Mr Hilditch was a prospector from Yundaga, near Menzies, while Mr Warman was an outstanding Kalgoorlie engineer who developed the world famous Warman pump, without which the international mining sector would be struggling to function.

They promoted their rich Mt Whaleback find as early as 1957 to what became Mt Newman Mining (now BHP Iron Ore), before Mr Hancock had signed his pivotal and now famous 1959 royalty agreement with Rio Tinto.

That agreement gave Mr Hancock and his partners access to royalties from the equally rich Tom Price iron ore deposit, which was pinpointed by two Rio prospectors, Bill Burns and Ian Whitcher.

Long-time Perth mining writer and author of books on several WA-based iron ore mining companies, John McIllwraith, says Lang Hancock coaxed Rio Tinto to the Pilbara at about the same time as Messrs Hilditch and Warman were coaxing other miners.

Just who was first and which team was the most crucial is best left for future historians to decide.

Commenting on these pioneering years, Mr McIllwraith said: “There followed months of negotiation and exploration, visits by Rio Tinto executives, and an agreement in 1959 with Hancock and his partner Peter Wright which gave them a 2.5 per cent royalty on all the minerals likely to be produced in the west and east Pilbara.”

Not widely known is that a third businessman, Stan Perron, was also party to the now famous Rio Tinto royalty agreement.

Mr Perron, by funding Mr Hancock and Mr Wright, was equivalent to Charles Warman, who had bankrolled Mr Hilditch’s Pilbara prospecting activities, which resulted in the rise of Mt Newman Mining.

Goldminer and author, Ron Manners, describes Mr Perron’s association with Messrs Hancock and Wright in his history of Kalgoorlie titled, Never a Dull Moment.

“Their [Hancock’s and Wright’s] third partner is Stan Perron who on March 15th 1959 was asked by Lang and Peter for 1,000 pounds to match their contribution, to fuel Lang’s Auster aircraft and for pegging costs,” Manners writes.

“This would enable them to go north and peg some iron ore deposits in areas Lang knew of.

“They were to be equal one-third partners. They felt that the State Government having just changed from Labor to Liberal, might release the land to private enterprise. Prior to that it had been under strict government control.”

Mr Manners quotes Stan Perron: “The following morning, Peter came to my office to collect the 1,000 pounds.

“But overnight I had gone a bit cold on the idea and compromised by giving him a cheque for 500 pounds for a 15 per cent interest, providing they required no further contribution for the next 10 years.

“I personally typed a letter setting out the conditions and hand it over with the cheque.

“From my 500 pounds investment, I have recouped my earlier losses in mining many times over, and my 15 per cent share in Tom Price royalties still returns about $1 million annually,” Mr Perron was quoted as saying several years ago.

The Hilditch/Warman/Mt Newman arrangement earned the two Goldfields identities a $1.6 million payout and 550,000 shares, which were later converted into royalty payments that yielded them an income for five years.

Mr Hilditch opted to become a farmer in NSW and was content with his finite payment arrangement. And so too was Mr Warman, who is now in a Sydney retirement home.

But the Hancock/Wright/Perron/Rio deal, which rested on the Tom Price find, runs the life of that operation and others in unspecified parts of the Pilbara because, as Mr McIllwraith points out, Lang Hancock negotiated the “royalty on all the minerals likely to be produced in the west and east Pilbara”.

A penultimate question is why Mr Hancock was able to negotiate an in perpetuity royalties deal while Messrs Hilditch and Warman, discoverers of WA’s other great iron ore deposit, couldn’t or didn’t.

“A key figure in these negotiations was Val (later Sir Val) Duncan, who had been managing director of Rio Tinto since 1951,” Mr McIllwraith says.

“Lang Hancock was an indefatigable advocate of the mineral wealth of the Pilbara and … people like John Hohnen who played a considerable role in negotiations, recall journeys with Lang.”

Interestingly, in 1977 Mr Hancock briefly outlined his negotiating approach, which Mr Duncan and Mr Hohnen agreed to, thereby ensuring he and his partners acquired 2.5 per cent of the value of Rio Tinto’s annual output in perpetuity.

Whenever he spoke to potential miners, Mr Hancock said, he’d tell them: “I’m not asking you for any money or any shares or participation.

“What I am suggesting is that you pay a royalty. If there’s nothing there, it costs you nothing. If there’s plenty there then you pay plenty and both sides will prosper from it.”

It’s this difference between the Hilditch/Warman/Mt Newman and the infinitely more favourable Hancock et al deal that is also the starting point of a series of bizarre legal twists and turns involving the descendents of Mr Hancock and Mr Wright, despite them now reaping an estimated $50 million annually, which is evenly split.

That means the return on Stan Perron’s 1959 contribution could bring him about $9 million annually, meaning the trio drew up the most lucrative contract in the state’s mining and business history.



  • 1952: Hancock flies through Turner River Gorge and sees iron.
  • 1953: Hancock begins promoting Pilbara as an iron ore province.
  • 1957: Stan Hilditch and Charles Warman find Mt Whaleback (near Mt Newman’s town of Newman).
  • 1959: Hancock, Peter Wright and Stan Perron sign a 2.5 per cent Rio Tinto royalty deal.
  • 1960: Canberra lifts iron ore export embargo.
  • 1962: Bill Burns and Ian Whitcher discover Mt Tom Price (near Hamersley Iron’s town of Tom Price).
  • August 1966: First shipment of Mt Tom Price iron ore dispatched from Dampier.
  • April 1969: First shipment of Mt Whaleback iron ore dispatched from Port Hedland.


Subscription Options