Gina Rinehart of Hancock Coal Writes Her Own Legacy With Coal Mine Site
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Mining magnate Lang Hancock and daughter Gina Rinehart at Rhodes Ridge iron ore deposit site in early 1980s.
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Gina Rinehart was beaming with enthusiasm as she entered the large marquee put up at the remote Alpha coal mine site in central Queensland on Sunday. She had invited about 100 guests to lunch to celebrate a very big day for her and her company, Hancock Coal.
But, as usual, it was all about work. No glamour here. Rinehart was dressed in casual pants and long shirt and joggers, complete with fluorescent safety jacket to drive down into the pit and admire the size of the project and, more importantly, what it could become.
A massive iron ore empire in Western Australia would seem more than sufficient for even the most energetic mining entrepreneur — or even a major mining company. But Rinehart, like her father before her, is determined to pioneer further development of the north of Australia, and the huge deposits of thermal coal in the Galilee Basin offer another incredible opportunity to do just that.
The test pit, over 50m deep, off to one side of the marquee marks the beginning of what Rinehart believes will be a vast new industry exporting thermal coal from the Galilee — led, she is confident, by her company. The first coal was extracted from the pit on June 20, with the first trial shipment due to leave Australia in September, headed for a South Korean power station.
It is that sort of drive that has made her the richest person in Australia, with an estimated worth of $10 billion or so, this year. Success in coal as well as in iron ore would push that figure up almost beyond comprehension, given that Hancock Prospecting is a private company with no other shareholders but Rinehart.
Yet that amount of personal wealth is not what animates Rinehart or caused her proud smile at the Alpha ceremony.
She is also extremely sensitive about any suggestion she just inherited her fortune and let the flow of royalties from her father’s legacy do the rest.
Instead, she pointed out that her “small but growing” company is currently developing four major world-class projects, plus the Hope Downs iron ore joint venture with Rio Tinto in the Pilbara — more than BHP Billiton is advancing at the moment. It is also often overlooked that when she took over Hancock Prospecting in 1992 after the death of her father, the business was in bad shape with massive debts.
“This substantial investment and financial commitment — despite media reports — have not been possible due to after-tax royalties,” she declared.
Over a lunch of cold meat and salads, Rinehart, 57, told the gathering that she had worked hard and looked after her children and grandchildren and could have chosen to enjoy the accoutrements of wealth. Instead, she said, she had chosen to concentrate on investing in Australian’s future. “For the cost of building this trial mine alone, I could have bought myself a beautiful new private jet,” she told her audience in a clear dig at peers like Andrew Forrest. “But you’ve seen those trucks and shovels out there. Who would be paying the wages of these contractors if I had spent that on a luxurious private jet and two pilots?
“Indeed, for the further costs of paying my terrific staff working hard on these projects and the consultants’ studies for the pre-feasibility study and the bankable feasibility study and now value engineering, together employing hundreds of people, I could have dotting for myself one or two beautiful yachts like many of my friends have and employed six or more yacht crew and taken off.”
Wayne Swan might not shed any tears at her willingness to do without billionaire playthings. And Rinehart also said she was happy with her choice because she knew she had done something important for Australia in the projects built to date.
But like so many others in the mining industry, she is warning that the imposition of a carbon tax and the proposed new mining tax will make it more difficult and far less attractive to invest in Australia.
Rinehart also attacked the “left-wing media” for suggesting she was being greedy and attacking the taxes out of self-interest when she could afford to pay more. She argues it is all about Australia’s ability to compete and that Canberra simply doesn’t understand this. The notion of being able to have a louder voice in what she believes is a very biased debate is believed to be a key reason for her accumulating her recent stakes in both the Ten Network and Fairfax. The arguments are certain only to become more intense as the government tries to implement its carbon tax and the mineral resources rent tax and the Greens take the balance of power in the Senate.
Despite her reluctance to give face-to-face interviews, Rinehart was certainly keen to explain her views to those who had traveled long distances to get to the Alpha mine site. The audience, which included her daughter and son-in-law, included potential clients and companies involved in the project as well as a smattering of federal and state opposition MPs. Queensland Premier Anna Bligh was represented by her Minister for Employment and Mines, Sterling Hinchliffe. No federal government minister was present and only a couple of journalists, but Seven director Ryan Stokes turned up, delighted to see what a fellow West Australian with an interest in media and mining was achieving in Queensland.
She said the new tax policies—and the high costs of development and regulation — were the reason her wholly owned Australian company Hancock Coal would not be able to maintain as large an equity stake in the new projects as she had once hoped although it would still be “significant”.
She is currently negotiating with potential overseas partners, including India’s GVK, to joint venture what will be a multi-billion-dollar investment. That will be required to develop initially two major coal mines and then a third as well as building the necessary 500 km rail link and new port infrastructure required at Abbot Point.
The prices and demand for thermal coal have made the distances and costs involved more feasible.
The investment in Queensland started with her father’s exploration leases in the area in the 1970s, but Rinehart has now developed that into three prospective mines, Alpha, Alpha West and Kevin’s corner. The plan is for Alpha alone to produce 30 million tons a year, over 30 years, with expected and total reserves of more than 8 billion tons.
Rinehart says Australia simply could not afford policies that deter exploration and investment.
“Despite these record prices, when our investment appeal and confidence should be at its highest, today’s policies have meant exploration is being discouraged and our exploration investment is back to 2003 levels. That is, pre-boom,” she says. “Where is Australian investment heading ? Offshore to the long-term detriment of our country and billions and billions of dollars being invested instead in West Africa, Brazil and elsewhere.”
According to Rinehart, Canberra doesn’t appreciate what is required to bring more investment and people to Australia’s north, including special tax breaks, few regulations and a welcome mat for overseas investment. Rinehart, with her father’s sense of determination and destiny, plans to use all her energy to change that equation.
— By Jennifer Hewitt, The Australian
About Hancock Coal
Hancock Prospecting Pty Ltd (HPPL) is a diversified Australian energy and resources company, with a strong record of pioneering the economic development of regional Australia.
Founded by Lang Hancock more than 50 years ago, HPPL has a long and proud history in minerals, exploration and development industries in Australia. Since it was established in the mid 1950s, HPPL has demonstrated a strong commitment to the growth of Australia’s mineral wealth, and has continued to seek and develop additional resource deposits across the country.
To stop by Hancock Coal’s website, CLICK HERE
To read the transcript of Gina Reinhart’s speech from the celebration, CLICK HERE
