Rio Tinto (AX:RIO) has agreed to a confidential out-of-court settlement with Industrial engineering services provider Monadelphous Group (ASX:MND)
over a $500 million dispute in Western Australia.
company stated that the costs of the settlement are “covered by the proceeds of insurance. The parties consider the matter has now been concluded”.
The mining giant was poised to file a lawsuit against Monadelphous Group at the Supreme Court of Western Australia. Rio Tinto wanted to claim compensation for damages sustained in a fire incident at Rio’s Cape Lambert iron ore processing operations. The miner’s lawyers highlighted Monadelphous’ violation of a maintenance contract as the cause of the blaze in January last year.
The disaster crippled Rio’s lump and fine iron ore separation facilities at Cape Lambert and hampered the mining heavyweight’s capacity to fulfill contract requirements with some of its iron ore customers. Rio was forced to declare force majeure on these buyers
Monadelphous believes the two long-term business partners have resolved the dispute in an amicable manner and the company is “looking forward to continuing to work closely with this very important customer into the future.”
Shares in Monadelphous Group (ASX:MND)
are trading 2.97 per cent higher at $11.11