Fortescue Ltd (ASX: FMG) shares are rising on Wednesday morning.
At the time of writing, the mining giant’s shares are up 1.5% to $22.20.
Fortescue shares rise despite court loss
The miner’s shares are rising on Wednesday despite the release of an announcement after the market close yesterday relating to a court loss.
According to the release, the Federal Court has delivered its decision in relation to the Native Title Compensation Claim that was commenced by the Yindjibarndi Ngurra Aboriginal Corporation RNTBC back in 2022 relating to the Solomon Hub.
The Federal Court determined that Fortescue is liable to pay compensation to the Yindjibarndi Ngurra Aboriginal Corporation RNTBC.
It notes that the total amount for economic loss is anticipated to be in the vicinity of $100,000 plus interest and the total amount for cultural loss is $150 million. The latter is significantly more than the “figure of no more than $8 million” that Fortescue suggested was appropriate.
The Federal Court has advised that it will publish the reasons for its decision at a later date. Fortescue intends to review those reasons when available.
How does this compare to expectations?
The $150 million that the Federal Court has awarded is a lot less than the Yindjibarndi Ngurra Aboriginal Corporation RNTBC was seeking.
It contended that mining companies in the Pilbara typically agree to pay a 0.5% royalty to traditional owners for use of their land.
Based on this, it calculated its economic loss on the basis of a percentage of royalties until the end of the operational life of the project, which is expected to be in 2045, to be in excess of $800 million.
It also separately sought compensation of $1 billion for cultural loss that it has suffered from the grant of the mining tenements.
In response to the news, a Fortescue spokesperson stated:
Dr Andrew Forrest and Fortescue care deeply about all First Nations people, including the Yindjibarndi community. Fortescue accepts that the Yindjibarndi People are entitled to compensation. The Company has agreed to and pays financial compensation under all of its other seven native title agreements. Fortescue has strong relationships with the First Nations people of the Pilbara region of Western Australia, with dedicated Heritage, Native Title and Community teams working hand in hand with Traditional Custodians to ensure cultural heritage is managed sustainably and responsibly.
The post Fortescue shares push higher despite order to pay Yindjibarndi $150m damages appeared first on The Motley Fool Australia.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.