WA’s largest indigenous trust has reported a huge jump in annual revenue after recording $166 million in royalty payments from Rio Tinto but this was not enough to resolve a long-running dispute.
WA’s largest indigenous charitable trust has reported a huge jump in annual revenue after recording $166 million in royalty payments from Rio Tinto but this was not enough to resolve a long-running dispute.
The General Gumala Foundation, which represents three traditional owner groups in the Pilbara, reported total revenue of $180.4 million in the year to June 2024, according to its latest financial statements.
That was a huge jump from FY23, when it had total revenue of $32.7 million.
The main contributor was Gumala’s decision to recognise a $125 million compensation payment from Rio as revenue in its FY24 accounts.
The $125 million payment was made in 2023 on a “without prejudice basis” as Rio and Gumala sought to resolve a dispute over royalties due under the Yandi land use agreement.
“Due to the ongoing dispute negotiations and lack of detail around this sum, it was not recognised as revenue in FY23 but held as a liability (under deferred revenue),” Gumala’s latest annual report explained.
“Since that time, whilst the final settlement of this dispute is ongoing, it is acknowledged by Rio Tinto that this sum will not need to be returned.”
Therefore, it has been recognised as revenue in the latest financial accounts.
Gumala Aboriginal Corporation, which manages the foundation, made clear the dispute with Rio was ongoing.
“GAC continues to engage with Rio Tinto to confirm the correct amount due,” it stated.
GAC said it spent $796,000 last year on legal costs related to the dispute and continues to work with law firm Slater and Gordon on the arbitration process.
While the dispute is ongoing, the Gumala foundation enjoyed a big jump in royalty payments under the Yandi agreement.
In FY24, total payments under the Yandi agreement nearly doubled to $40.9 million.
However, the quarterly contributions varied widely, from $4.2 million to $17.7 million.
The Gumala foundation has been trying for more than seven years to update the Yandi agreement to reduce the degree of volatility, which arises because royalties are based on the amount of ground disturbance at Rio’s Yandicoogina iron ore mine.
Land use agreements negotiated by other Aboriginal groups typically calculate royalties based on the value of production from relevant mines.
Rio Tinto declined to comment on its relationship with Gumala.
A spokesperson said the miner was “continuing to engage with our Traditional Owner partners in the Pilbara to both modernise our existing agreements and discuss new protocols for the co-design of future operations on their Country".
The foundation’s FY24 report highlighted its growing scale, with total assets increasing to $354 million.
That makes it the largest indigenous charitable trust in WA, according to Business News’ Data & Insights’ database.
Its assets are primarily invested in listed equities, fixed interest securities and cash.
The foundation also has a investment property portfolio, valued at $34 million.
This includes 42 properties, mainly in Hedland, Karratha and Tom Price, that are being used in its housing support program
The foundation distributes surplus income to GAC and GAC’s wholly-owned subsidiary Gumala Enterprises.
