2 July 2014
It is the first time Mrs Rinehart, a long-time advocate for the development of Australia’s far north, has invested in the agribusiness sector, after two decades spent building up her private company, Hancock Prospecting, into a mining behemoth.
“She is really putting her money where her mouth is,” said a person familiar with the deal.
Hancock Prospecting said today it had bought a 50 per cent interest in the Liveringa and Nerrima cattle stations, which measure a combined 4700 sq km.
The Australian understands that Hancock Prospecting had been negotiating the deal for about eight months and is also close to finalising talks to purchase other pastoral assets in the region, as part of a quest by Mrs Hancock to become a key player in the industry.
Mrs Rinehart’s mining rival, Fortescue Metals Group chairman Andrew Forrest, is embarking on a similar quest after buying Western Australia’s biggest beef producer, Harvey Beef, for more than $30 million in May.
The twin deals confirm that Mrs Rinehart and Mr Forrest view the potential growth in demand for Australian beef is in the same way they have grown rich from China’s soaring demand for the Pilbara’s iron ore over the past decade.
The largely untapped Chinese market is seen as the holy grail for the Australian beef industry, both for processed beef and live cattle exports.
In another deal last month, WA meat processor V & V Walsh entered a $1 billion joint venture with the Inner Mongolian government and a Chinese farming group that will provide a massive boost to the company’s lamb and cattle exports to China.
Hancock said today it had entered a 50:50 joint venture to buy the cattle stations with the Laitt family’s private company Dowford Investments, the parent of Milne Agrigroup, one of WA’s biggest agribusiness groups.
Milne Agrigroup’s businesses include Milne Feeds, Mt Barker Free Range Chicken and Plantagenet Free Range Pork.
The joint venture has also acquired the mothballed Waroona Abattoirs, which was previously one of WA’s biggest meat processors.
Hancock said it had invested in the venture to provide capital and commercial knowledge to support the industry as it targets expansion into global markets.
“Australia’s north has vast potential as a food producer and we are well placed to meet the growing needs of our Asian neighbours,” Mrs Rinehart said.
“We are already exporting some of the finest produce in the world.
“My family has had a long history in the West Australian pastoral industry with our interest continuing over generations in Mulga Downs Station in the Pilbara.
“I spent part of my childhood growing up on Mulga Downs and in the Pilbara, and have had a life-long regard for people in the outback, particularly in Northern Australia,” she said.
Milne Agrigroup managing director Graham Laitt said he was pleased to welcome an investor with Hancock’s capital and knowledge of export markets.
“We are especially pleased that Mrs Rinehart has been attracted to Liveringa and Nerrima,” he said.
“The first step for the industry is for it to increase its scale so that it can be a reliable supplier in the emerging export markets.”
Courtesy of The Australian