Fortescue Metals Group Limited (ASX: FMG) has seen its share price sink more than 3% to $5.19 at the end of trading after earlier hitting a high of $5.42.
The reason for the fall is that the Federal Court has found in favour of an indigenous group (Yindjibarndi Aboriginal Corporation) that was claiming exclusive native title rights over land that includes Fortescue’s huge Solomon iron ore mine. That could lead to Fortescue having to pay millions if not hundreds of millions of dollars in compensation.
With estimates that the Solomon hub could produce up to $280 billion in revenues over its life, it could be an expensive decision for Fortescue Metals.
Yindjibarndi Aboriginal Corporation is reported to have filed the first claim in 2003, making it one of the longest-running native title cases in Australian history. The Corporation has been fighting with Fortescue over royalties and land access since 2007 according to The Australian.
However, the matter is unlikely to be settled anytime soon, with Fortescue likely to appeal the ruling, meaning more court time. That could hang over the share price until the matter is resolved.