Hancock Prospecting, led by Gina Rinehart, has lost an important legal battle relating to he big Rhodes Ridge iron-ore project in Western Australia.

The case has been dismissed at a court but the company has shown resolve to contest some of the orders. A court order in 2010 had forced the company to give up 25 per cent stake in the project. As a result, Wright Prospecting was able to increase its stake to 50 per cent and this honored an agreement between Lang Hancock, Gina Rinehart's father, and his business partner Peter Wright in 1984.

Hancock Prospecting's appeal was dismissed by the WA Court of Appeal on Tuesday as Justice Carmel McLure pointed out that Mr Hancock had already expressed concerns when he was alive that a lack of agreement would result in dispute between the descendants of the two men.

Justice McLure ruled, "The genesis of this dispute is an agreement entered into when the men were in the 70s and Mr Hancock was concerned that the hitherto harmonious and cooperative relationship between the partners would not survive the changing of the guard to the next generation who would take control of the corporate vehicles."

Justice McLure also said that the court battle shows that Mr Hancock's fears were based on solid concerns.