By Isobel Millward and Greg McIntyre, Life Member of the Law Society and past President of the Law Society
The Federal Court has delivered a landmark judgment on compensation for future acts under the Native Title Act 1993 (Cth), awarding the Yindjibarndi people $150 million for cultural loss and approximately $100,000 for economic loss arising from Fortescue Metals Group’s (FMG) Solomon Hub mining operations on their native title land. This is the largest native title compensation award in Australian history.
Background
- In 2017, the Yindjibarndi people obtained a Native Title Determination recognising exclusive possession rights over parts of their Pilbara country.
- While the determination application was pending, the State granted 36 mining tenements to FMG, enabling development of the Solomon Hub Project.
- The project covers approximately 135 km² of Yindjibarndi land within a broader 563 km² compensation area.
- Since development began, Solomon Hub has generated an estimated $80 billion in revenue, with tens of billions more expected before the tenements expire in the mid‑2040s.
- The Yindjibarndi sought compensation from the State and FMG for the impact of these grants on their native title rights.
Key legal issues and findings
Applicable legislation
The Court confirmed that compensation must be assessed under the Native Title Act, not the Mining Act 1978 (WA). Section 24MD of the Native Title Act governs future acts that affect native title and therefore applied to all tenements.
Characterisation of the tenements
FMG argued that some tenements were merely “water licences.” The Court rejected this, finding that all 36 tenements were future acts requiring compensation.
Relevance of exclusive possession rights
The Court held that exclusive possession rights recognised in the 2017 Determination were relevant to the compensation claim and applied from the date the claimant application was filed in 2003, by operation of ss 47A and 47B of the Native Title Act.
Economic loss
The Yindjibarndi sought an economic loss figure exceeding $800 million, based on a notional 0.5% royalty model commonly used in Pilbara agreements. The Court rejected this approach. The State had submitted that the economic loss was $121,114 and FMG put it at $95,197.
Consistent with the High Court’s reasoning in Northern Territory v Griffiths [2019] HCA 7, the Court held that:
- Economic loss must be calculated by reference to the freehold value of the land, applying the test in Spencer v Commonwealth of Australia [1907] HCA 82 by asking what a willing purchaser would pay to a not unwilling but not anxious vendor,
- Adjusted to reflect the nature and extent of the native title rights,
- And cannot be based on mining profits.
Applying this methodology, the Court assessed economic loss at approximately $100,000, with the final figure to be calculated by the parties.
Cultural loss
The Court accepted extensive evidence of profound cultural, spiritual and emotional harm caused by:
- The complete destruction of 124 spiritually significant sites,
- Significant damage to songlines, burial places, caves where ancestors’ spirits dwell and resource areas,
- Removal of artefacts from 240 sites,
- Large‑scale industrialisation of country,
- Dewatering impacts on creeks and groundwater,
- Exclusion of Yindjibarndi people from fenced‑off areas of their ngurra (country).
The Court emphasised the deep, sentient relationship between the Yindjibarndi and their country which permeates all aspects of their lives, and the severe distress caused by witnessing its transformation.
While the Yindjibarndi had sought $1 billion for cultural loss, the Court awarded $150 million, noting the scale and gravity of the harm but declining to adopt a profit‑based or royalty‑based model. The State had submitted that the cultural loss should be assessed at $5-10 million and FMG that it should be assessed at $8 million.
The area affected by the 36 mining tenements comprising the Solomon Hub mining operation occupied 135 square kilometres of the 563 square kilometre native title determination area of the Yindjibarndi people. The mine operation involves stopping the water courses within the area and the removal of 30,000 tonnes of iron ore per shift.
By way of comparison, in Northern Territory v Griffiths the area affected was 1.27 square kilometres of freehold tenure. The economic loss was assessed at $512,000, after dividing the freehold value by 50% because the native title was non-exclusive, and the cultural loss was assessed at $1.3 million. If the economic loss to the Yindjibarndi had been assessed at the same value by area the economic loss would have been $576 million.
In Gungariji, Yariyuwa and Yanyuwa-Marra Peoples v Northern Territory of Australia (No 5) [2026] FCA 153 (McArthur River case) the Court assessed cultural loss at $54 million, taking into account that it was ‘intergenerational and enduring’ and economic loss at $743,408.
Outcome
- Economic loss: FMG liable for approximately $100,000.
- Cultural loss: FMG liable for $150 million.
- The State was not found liable for compensation.
- The total compensation is largest award in Australian native title history.
What now?
Michael Woodley, spokesperson for the Yindjibarndi People, has said to Ngaarda Media that, following the decision, their legal advisers are considering the reasons for decision for prospects of an appeal.
Kado Muir, a Ngalia Traditional Owner and native title holder, Anthropologist and Chair of the National Native Title Tribunal, in an article entitled “Fructus Nullius: Why Native Title Compensation Is Asking the Wrong Question”, points out that the approach to calculating loss based on a static predicted freehold value of land if sold is flawed in relation to native title, which is inalienable.
Instead, he is advocating a sui generis approach to calculation of compensation of loss of native title based on customary economic modes, including what the country produces over time, in terms of food, water, medicine, fibre, ecological knowledge and the economic foundation of life. He suggests that the question should not be “What does the country sell for”, but “What does the country produce”.
The application of this argument presently faces a significant impediment in the form of section 51A of the Native Title Act 1993 (Cth), which provides that where native title is extinguished, the total compensation payable must not exceed the amount that would be payable if the act had instead been a compulsory acquisition of a freehold estate in the land or waters.
The Muir thesis suggests a broader approach than has so far been applied to what is assessed as the economic value of the land, taking into account its productive value. If the land contained within the Solomon Hub was put on the market today would a purchaser and FMG, as seller, not take into account its productive value?
