Perth’s super-rich Wright family has reaped a further $235 million in profits from iron ore royalties, but the most revealing number in their family company accounts was the big spend on lawyers.
Perth’s super-rich Wright family has reaped a further $235 million in profits from iron ore royalties, but the most revealing number in their latest family company accounts was the big spend on lawyers.
Wright Prospecting posted a profit after-tax of $235.5 million for the year to June 2023, according to annual accounts lodged with the Australian Securities and Investments Commission.
In keeping with normal practice, the entire profit was paid to family members as dividends: $238 million to be precise.
Wright Prospecting was established by the late Peter Wright, and his successors continue to benefit from iron ore royalties he negotiated (in tandem with the late Lang Hancock) with Rio Tinto in the 1960s.
The company earned $201 million as its share of income from the ‘Hancock & Wright’ partnership and a further $162 million in ‘mining royalties income’.
Total income of $364 million was down from the highs of $431 million in FY22 and $435 million in FY21, when iron ore prices were higher.
Profit was also lower, down from $295 million last year.
The company is spending big on lawyers to ensure it maximises future royalties.
Wright Prospecting typically spends about $4.5 million on legal expenses each year – its biggest operating cost – but that number jumped to $12.7 million last financial year.
In a brief director’s report, it was noted that litigation costs increased “due to the timing and level of activity in respect of the legal proceedings the group is currently involved in”.
Most notably it is in the midst of a legal battle with Gina Rinehart’s family company Hancock Prospecting and other parties over ownership of lucrative iron ore tenements in the Pilbara and their entitlement to royalties.
Corrs Chambers Westgarth, which represents Hancock Prospecting, would be reaping similar fees.
Other firms sharing in the fees windfall include Taylor & Taylor Lawyers, which represents DFD Rhodes, the wealthy family company established by Pilbara mining pioneer Don Rhodes.
Sydney-based YPOL Lawyers is also on the case, representing John Hancock and Bianca Rinehart.
Meanwhile, the major commercial development affecting Wright Prospecting last year was the negotiation of an updated joint venture agreement with Rio Tinto over the Rhodes Ridge iron ore deposit.
Rio is aiming to develop Rhodes Ridge by the end of the decade, with production starting at 20 million tonnes per annum and potentially increasing to 100mtpa.
With Rhodes Ridge containing high-grade ore (65 per cent iron) and being close to existing infrastructure, it is likely to be highly profitable.
That means the Wright family’s fortune could eventually rival that of Mrs Rinehart, who is ranked as Australia’s wealthiest person with a fortune of more than $30 billion.