By James Regan

By James Regan

SYDNEY (Reuters) - Australia's Federal Court has ruled in favor of an indigenous Aboriginal group's claims over land used by Fortescue Metals Group <FMG.AX> to mine millions of tonnes of iron ore in Western Australia's Pilbara region.

The ruling gives the Yindjibarndi people exclusive native title rights over land covering the iron ore giant's Solomon mining hub, a vast mineral-rich project capable of yielding up to 70 million tonnes of iron ore a year.

Native title is a legal doctrine in Australia that recognizes indigenous rights to certain parcels of land. The case was brought on behalf of the Yindjibarndi people against the government of Western Australia state.


Yindjibarndi leader Michael Woodley said they would now seek compensation from Fortescue because it had built the Solomon operations without an appropriate land-use deal with the group.

"There’s an economic loss, a cultural heritage loss and then the pain and suffering caused,” Woodley told Reuters in a phone interview.

He did not specify the amount that would be sought.

In a statement emailed to Reuters, Fortescue Chief Executive Nev Powers said the company had built strong relationships with the majority of the Yindjibarndi community, providing businesses opportunities, renumeration and housing while protecting heritage areas.

"We don't agree with Michael Woodley's comments and intend to appeal the decision to ensure the Native Title Act applies as intended," Powers said.

In an earlier statement to the Australian Securities Exchange, Fortescue said it did not anticipate any material financial impact from the court’s decision and it would have no impact on the current or future operation of the mine.

Fortescue, whose founder and chairman Andrew Forrest is one of Australia's wealthiest men, started as a small exploration company in 2003. Within 10 years it had become the world's fourth biggest supplier of iron ore, with annual revenue exceeding $7 billion last year.

Fortescue stock fell 3.5 percent on Thursday despite gains in iron ore prices, with most of the losses coming after the court ruling was made public. It was Fortescue's biggest one-day loss in a month.

The case is Warrie (formerly TJ) (on behalf of the Yindjibarndi People) v State of Western Australia in the Federal Court of Australia.

(Reporting by James Regan; Editing by Lincoln Feast)

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