Article by Brad Thompson courtesy of Australian Financial Review.
Wesfarmers boss Rob Scott is an unabashed fan of billionaire mining magnate Gina Rinehart and her achievements in business and contributions to philanthropic and community causes.
Rinehart, says Scott, is “the driving force behind one of Australia’s largest and most successful private companies, which has created thousands of jobs and billions of dollars of value to the community”.
He adds: “She is ambitious for Australia and our key export industries and is investing to make a difference.
“Many people would not appreciate the extent and generosity of Gina’s philanthropic and community support, but it is substantial, and her support of many of our Olympic athletes is remarkable.”
High praise indeed, coming from one of Australia’s most measured chief executives.
In 2023 Rinehart’s business activities extended to a plunge into critical minerals, as well as acquisitions of onshore gas assets, iconic Aussie brand Driza-Bone and a country town farmer’s market.
It is for her preparedness to take big bets, her foresight and the role she has played in shaping the Australian economy both in 2023 and over several decades that is behind the judges’ decision to name Rinehart The Australian Financial Review Business Person of the Year.
Indeed, the $5 billion profit generated by Rinehart’s main business vehicle, Hancock Prospecting, this year underpins the size of the role she plays on Australia’s business landscape.
The jury is out on Rinehart’s industry-disrupting big bet on lithium, but there were also plenty of doubters when she raised $US7.2 billion ($10.4 billion) in debt funding to build the Roy Hill iron ore mine that supercharged her wealth.
Awards such as this year’s accolade run in the Rinehart family. Her father, iron ore industry pioneer Lang Hancock, was recognised as one of the seven business people who helped shape modern Australia when The Australian Financial Review celebrated its 70th anniversary in 2022.
Iconoclastic Hancock paved the way for an iron ore industry that provides the backbone to Australia’s economy, but he never made the leap from prospector to miner and left behind an estate that was eventually declared bankrupt following a legal battle.
His daughter, however, did make that leap, and this year Rinehart spread her wings into a WA lithium industry that produced a record $21 billion in export revenue in 2022-23 compared to iron ore’s $125 billion.
Entering 2024, Rinehart is more worried about Australia’s economic future than ever. Her Hancock Prospecting entities have raised alarm over the Albanese government’s energy market intervention, industrial relations changes, its safeguard mechanism and blowouts in approval times for new mines.
Rinehart’s aggressive push into lithium comes as she looks long-term to life beyond the rivers of cash flowing from Roy Hill. But it comes with a cry for better policy settings.
“We are a patriotic Australian company, and we like to make quality investments in iconic West Australia and Australian businesses, and in projects that our country needs to maintain and improve living standards,” she says.
“Too many of our politicians, especially the ones in faraway Canberra, and too many of our left inner-city media too, don’t have a real understanding of how important investment and our primary industries are.
“Australian mining and agriculture feed, clothe, heat and build the world, and if you take them away not only do you relegate Australians to poor living standards, fewer jobs, lower wages, less export revenue and less government tax revenue, but you also deprive our allies of the food, fibre, metals and minerals they need.”
Pass the wagyu
The Albanese government pushed controversial workplace changes labelled economic vandalism by the Minerals Council of Australia on December 7.
It was the same day Roy Hill paid out an annual profit share bonus, which can be up to 33 per cent of base wages, to mine workers.
Those same workers cheered when Rinehart announced a new bonus scheme and again when told more wagyu beef from her vast cattle operations would be supplied to mine site kitchens.
Rinehart’s spending spree on lithium stocks in 2023 included forking out about $1.3 billion for a 19.9 per cent stake in Liontown Resources. Most of the Liontown stake was acquired at or just below $3 a share – the offer price put forward by New York-listed Albemarle in an indicative $6.6 billion takeover bid.
Albemarle eventually walked away from the deal, citing “growing complexities”. Liontown shares have since slumped to $1.34, representing a massive on-paper loss for Rinehart.
Rinehart, who appears to be playing a long game in lithium, also weighed into Azure Minerals when it became the target of a takeover offer from Chilean company SQM.
Wesfarmers also has high hopes for lithium in WA and expects to generate its first cash flows from mining the battery mineral in partnership with SQM this financial year.
Rinehart started 2023 with victory in a hard-fought takeover battle for Warrego Energy and its onshore gas assets in the Perth Basin.
The deal-making and sharemarket raids continued despite the distraction of legal battles with two of her four children, and with the descendants of her father’s former business partner, Peter Wright.
Rinehart, who turns 70 in February, thinks 2023 may have marked a turning point in terms of the public’s view of radical political correctness, and green and other activists targeting industry.
“Many Australians are struggling with the rising cost of living and higher interest rates, and I think this means that certain things that may be popular or in focus in less difficult times are becoming pushed to the side,” she said.
“Many Australians just want to work and provide for their families and perhaps make a better life for themselves – something that governments ignore and make more difficult.”
