Asia’s richest woman Gina Rinehart’s Hancock Prospecting Pty and Wright Prospecting Pty have settled a royalty dispute with billionaire Stan Perron, who claimed he’d been short-changed for a decade on mining royalty payments.

The dispute, which was set to go to trial May 28 in the Supreme Court of Western Australia in Perth, involved four of Australia’s 20 richest people. Royalties from Rio Tinto Plc (RIO)’s Brockman 2 mine may be worth tens of millions of dollars, and Perron, 89, claimed Hancock and Wright withheld money owed him.

“A settlement has been reached,” Ross Robertson, chief executive officer of the Perron Group, said by phone from Perth yesterday. “We’re satisfied with the outcome.” He declined to give details, saying the settlement was confidential.

Lang Hancock, Gina’s father, and Wright Prospecting founder Peter Wright discovered iron ore deposits in the Pilbara region of Western Australia in the 1950s. The find now makes Rio Tinto, which operates mines through Hamersley Iron Pty., the biggest producer in the country. The prospectors’ companies collect a 2.5 percent royalty from a 1962 agreement with Rio Tinto on sales of iron ore mined at some of the Pilbara properties.

Hancock and Wright, seeking help to pay for prospecting in the area, approached Perron in 1959, according to “The House of Hancock: The Rise and Rise of Gina Rinehart,” by Debi Marshall.

15% Interest
Perron agreed to provide 500 pounds, Marshall wrote. Hancock and Wright, in 1964, assigned Perron a 15 percent interest in the royalty agreement, according to the court documents. Perron had rejected a proposal from Hancock and Wright to double his royalties for an additional 500 pounds, Marshall wrote.

The Brockman 2 mine, in the Hamersley mountain range of Western Australia, produces between 8 million tons and 9 million tons of iron ore annually, said Gervase Greene, a spokesman at Rio Tinto.

At a price of $131.20 a metric ton, on May 21, 8.5 million tons of iron ore would be valued at $1.1 billion. The Hancock and Wright royalty take would be worth $27.9 million, with Perron entitled to $4.2 million this year, if his claim were upheld.

“Rio Tinto has no role in the proceeding and will abide by any order of the court,” the company said in an e-mailed statement.

Rinehart Fortune
A woman who answered the phone and declined to identify herself at Wright Prospecting in Peppermint Grove, Western Australia, said the company wouldn’t be commenting on the case.

Rinehart, who inherited the iron-producing properties from her father, is ranked the 31st richest person in the world, with a net worth of $18 billion, according to the Bloomberg Billionaires Index.

Michael Wright and Angela Bennett, Peter Wright’s heirs, are ranked the 14th richest Australians, with a net worth of A$2.14 billion ($2.11 billion) in the 2011 BRW Rich 200 list. Perron is ranked 18th by BRW with a net worth of A$1.88 billion.

Perron used royalties from the iron-ore properties over almost half a century to help build a real estate business comprising commercial office buildings, shopping centers and car dealerships.

Perron agreed on May 17 to buy a 50 percent stake in Centro Retail Australia (CRF)’s three regional shopping centers for A$690.4 million.

Although Wright and Hancock’s initial royalty agreement with Rio Tinto is 50 years old, whether the contract covers some properties remains in dispute.

2009 Lawsuit
Hancock Prospecting and Wright Prospecting sued Rio Tinto in New South Wales Supreme Court in 2009 claiming they’re owed royalties on ore sales from the Channar and Eastern Ridge mines. The parties are exchanging information ahead of a trial, a date for which hasn’t been set.

Hancock has also sued in the Supreme Court of Western Australia claiming royalties on other properties. The company receives no royalties from Rio Tinto’s biggest mine, Yandi, or its Robe River operations, Mark Bickerton, a Hancock spokesman, said in a March e-mail. Bickerton didn’t respond to e-mails requesting comment on the Perron lawsuit.

Hancock and Wright receive royalties from sales of ore at Mount Tom Price, Marandoo and Paraburdoo mines, Bickerton said. Brockman 2 is about 60 kilometers (37 miles) north-west of Tom Price.

The case is Between S.P. Investments Pty and Hancock Prospecting Pty. CIV3074/2010. Supreme Court of Western Australia (Perth).