Article by Brad Thompson courtesy of the Australian Financial Review.
Gina Rinehart-controlled Atlas Iron has doubled down on her warnings about the Albanese government’s industrial relations changes after delivering its first dividend for the mining billionaire.
Atlas Iron chief executive Sanjiv Manchanda said a strike in Western Australia’s iron ore-rich Pilbara region would hurt indigenous communities as well as hit businesses, trade, government income from taxes and royalties.
“For instance, even a six-week strike in the Pilbara would result in a loss of $15 billion or more, reducing tax revenue, royalties and payments to the indigenous peoples who rely on such payments,” he said.
Atlas Iron delivered a $225 million dividend to Mrs Rinehart’s Hancock Prospecting, the first since she prevailed in a three-way battle with Andrew Forrest’s Fortescue Metals Group and Chris Ellison’s Mineral Resources for control of the then ASX-listed miner in 2018.
The dividend came despite a big drop in profit and revenue in the year to June 30 as iron ore prices slid from record highs.
Atlas said the average realised price for its iron ore fell to $US107 a tonne in 2021-22, down from $US134 a tonne in the previous year.
The company reported a $302 million profit, down from $938 million, and revenue of $1.32 billion compared to $1.7 billion a year earlier.
Atlas, a smaller cousin to Hancock Prospecting’s Roy Hill operations, sold 9.8 million tonnes of iron ore and paid $81 million in royalties to the WA government.
It operates the Mt Webber, Sanjiv Ridge and newly commissioned Miralga mines in the Pilbara and has more than $700 million earmarked for new mines and growth projects.
Atlas said its board had approved $605 million to develop the McPhee Creek project, where it expects to start commissioning work in mid-2023, $46 million for a feasibility study for stage 1 of the Ridley magnetite project and $60.5 million to upgrade Stock Yard 2 at Utah Point in Port Hedland to secure long-term access.
In a speech last week, Mrs Rinehart – Australia’s richest person – warned the nation’s pensioners faced “heat or eat” choices because of soaring electricity costs and hit out at planned industrial relations changes which include multi-employer bargaining.
“For those of us who recall the strikes and turbulence, even violence, and consequent product delivery unreliability of the ’70s, I do hope you are very active in urgently protecting our essential industry against potentially damaging IR changes,” she said.
In a statement on the latest Atlas results on Monday, Mrs Rinehart said the company’s partnership with an indigenous contracting business, East West Pilbara, was more evidence that “when mining does well, WA and Australia does well”.
“Our investments in Atlas and across the group are leading to significant tax and royalty revenues for governments, and payments to indigenous peoples, along with bringing opportunities and greatly increasing living standards across the places where we operate,” she said.
Atlas completed construction of the Miralga mine safely, on budget and ahead ofschedule, with East West Pilbara carrying out civil and construction works as well as being involved in ongoing operations.
East West Pilbara, which works through a joint venture with Ozland, is a Nyamal-owned business operating on Nyamal native title land.
In its results commentary, Atlas called on the WA and federal government to cut the regulatory and tax burden on businesses given the challenging global environment, inflation pressures and rising costs.
“This is critical as the iron ore market continues to show lower ore prices, and more layers of government tape increase uncertainty at the very time business needs less onerous government burdens and less risk, to support future investments,” it said.
