Here’s how long Gina Rinehart’s wealth could keep Australia running

by 24 May 2018

Neale Prior and Daniel Newell

The West Australian
Wednesday, 23 May 2018 1:30PM
 

With a mammoth and ever-increasing cash pile there is no good reason for Australia’s richest person, and the 85th-ish richest person walking the planet, not to be pretty relaxed.

If Gina Rinehart appears more laid-back than usual it is probably because a few months ago she was able to tell the world her Roy Hill iron ore mine had started making money.

Lots and lots and lots of money — which is how she made Bloomberg’s Robin Hood Index.

Published earlier this year, the annual index shows how many days the richest person of each country could hypothetically keep their governments running.

With the Federal Government burning through $1.494 billion a day just to keep the lights on, Bloomberg estimates Mrs Rinehart’s $16 billion net worth could keep things in Australia ticking over for 11 days.

The world’s richest person, Amazon founder Jeff Bezos, could use his $99 billion to run the US for five days.

Cyprus’ John Fredriksen could run his country for 441 days with his $10.4 billion but China’s Jack Ma would have spent his $45.5 billion in just four days.

The problem is Mrs Rinehart might not have the cash on hand to bail out Australia, which would have to hope Rio Tinto and Hancock Prospecting keep sending shiploads of iron ore to Asia.

At least 90 per cent of Mrs Rinehart’s wealth is tied up in her Roy Hill and Hope Downs iron ore joint venture, and in her family’s right to royalties from most of Rio Tinto’s Pilbara iron ore operations.

The guess of the crew behind WA’s Rich List is that Australia would have to get by on $6 million less a day if it was to tap into Mrs Rinehart’s cash-flow.

This means Australia would have to cut its annual spend by more than 99 per cent a day, meaning Federal Parliament would have to meet by telephone if they had the money to keep going.

Unsurprisingly, Mrs Rinehart again topped this year’s, with our slightly less impressive estimate of a $12.93 billion, still up on last year’s $10.52 billion.

The Rich List estimate of Mrs Rinehart’s wealth allocates a quarter of her flagship Hancock Prospecting to her four children.

Production at Roy Hill may have tentatively started production a couple of years earlier but it was not until November 2017 that Roy Hill Holdings celebrated its maiden annual profit and marked the first full year of commercial production from the $US10 billion mine.

The bottom-line profit of $523 million vindicated Mrs Rinehart’s decision to go it alone and fulfil her family’s dream of owning its own iron ore mine.

Roy Hill Holdings, 70 per cent of which is owned by Mrs Rinehart’s Hancock Prospecting, recorded sales revenue of $2.3 billion on selling about 33 million tonnes of iron ore for the year. It had achieved its targeted run rate capacity of 55 million tonnes a year.

Four years after painstakingly stitching together funding for the project from Japan’s Marubeni, South Korea’s Posco and China Steel Corporation — and 60 years after her father Lang claimed he had discovered the world’s biggest iron ore deposit — Mrs Rinehart had done it.

She could now turn to other things, such as cows and politics.

A year after buying Australia’s biggest cattle business, S. Kidman and Co, Mrs Rinehart ramped up her exposure to the sector by boosting her Australian herd to serve up more premium steak to discerning customers in China.

On the political front, Mrs Rinehart this year proved she was a chip off the old block when it came to making her thoughts known to MPs. She spent Christmas Day penning a 700-word email to Premier Mark McGowan, blasting him for daring to mess with funding for the Schools of the Air.

The scathing transcript noted that “… the principles of equity and universal access that have underpinned education in Australia for many decades have been abandoned with this shameful decision”.

Mrs Rinehart didn’t limit her activism to parish pump politics. Late last year she called on Australian governments to follow the examples of US President Donald Trump and Indian Prime Minister Narendra Modi in creating a more internationally competitive environment by cutting company taxes and red tape.

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