International Royalty Corp. and minority partner Altius have launched a court challenge against mining giant Vale Inco over alleged underpayment of royalties on the sale of nickel concentrates from the Voisey’s Bay mine in northern Labrador, Canada. Denver-based International Royalty, which holds a 90% interest in the Labrador Nickel Royalty LP, filed the claim against Vale in the Supreme Court of Newfoundland & Labrador. It alleges Vale Inco underreported royalties called net smelter returns when it bought nickel concentrates from its own subsidiary Vale Inco Newfoundland and Labrador Ltd. The net smelter returns are the basis for payment of a three percent royalty due to International Royalty and Altius from the sale of the concentrates from the Voisey’s Bay nickel-copper-cobalt mine. Specifically, the International Royalty-Altius partnership said payments made by the parent Vale Inco to Vale Inco Newfoundland “do not represent fair market value and Vale Inco has incorrectly calculated the NSR paid.” The partnership also alleges Vale Inco Newfoundland has deducted income taxes paid to the province “which is not allowable under the royalty agreement.” International Royalty and Altius estimated their share of royalty underpayments up to 30 June 2009 would come to more than USD 26 million, before deduction of royalty taxes. The allegations were not yet proven in court.