10 December 2015
Gina Rinehart says she has fulfilled her dreams and that of her father Lang Hancock as the first ore from her $10 billion iron ore mine in the Pilbara set sail from Port Hedland on Thursday.
As the mining magnate gave the final orders via two-way radio to workers on board the MV Anangel Explorer to finish loading the first ore from her $10 billion Roy Hill Pilbara mine, she proudly told a crowd of about 70 employees, equity partners and media gathered in Port Hedland that the “dream” had been realised.
“At that time I did not realise this would be a deposit of iron ore that allowed me to fulfil my father’s and my dream to be an operator-owner,” Mrs Rinehart said.
The Roy Hill tenements were pegged by Hancock Prospecting in the early 1990s.
Mrs Rinehart embraced her youngest daughter Ginia on stage and paid tribute to her staff, including “night secretaries” who worked extraordinary hours to help turn her dream into a reality.
For the first time since her father pegged iron ore rich tenements in the Pilbara in the 1950s and 1960s her family is now operating its own mine, rather than just cashing royalty cheques from Rio Tinto.
Mrs Rinehart showed a rare vulnerable side when she looked back on the challenges she and her executive team faced to develop Australia’s single biggest iron ore mine. It includes the largest debt finance project for a land-based mining project. The mine, near Newman, is connected to Port Hedland by a 34-kilometre railway.
“Frankly, I had no real understanding of the challenges, the risks and the very hard work ahead and had I had a better appreciation of this at the time who knows what I would have done,” she said.
But the biggest hurdle for Mrs Rinehart and her minority equity partners could be yet to come.
The iron ore price has fallen below $US40 per tonne, putting pressure on profit.
Roy Hill chief executive Barry Fitzgerald said based on current prices he believed its its target production – 55 million tonnes per year – would be profitable.
“We believe they are,” Mr Fitzgerald said.
“The challenge at the moment is to drive production up to 55 million tonnes. I know that sounds a bit strange in the current market but we have to, like everyone else, get the volume through our economies of scale.”
He said the first shipment was about two thirds full at 105,000 tonnes because of restrictions placed on its initial six shipments by the Port Hedland port.
Roy Hill is aiming to get to an annual 55 million-tonne output within 15 months.
Absent from the Port Hedland ceremony were her eldest children John Hancock and Bianca Rinehart, who have spent years embroiled in legal disputes with their mother.
Mr Hancock told Fairfax Media he was proud of his mother, but not without criticising her.
“My grandfather would be very proud of my Mother, as am I,” Mr Hancock said.
“But I’m sure he would want the tenements in the entity he made the original Roy Hill application in.”
A legal dispute over the Roy Hill tenements is ongoing. Mr Hancock and Bianca Rinehart argue their grandfather left his grandchildren the Roy Hill exploration leases, not their mother, and have accused her of shifting the leases between Hancock companies to her benefit.
Mrs Rinehart used her speech to again hit out at the media for the coverage of the project’s development.
She declined to take questions from the media Roy Hill invited to report on the event, saying if she responded to questions she would be misquoted.
Mrs Rinehart spoke for about 20 minutes and twice referenced the “great leader” Winston Churchill.
“It is no use saying we are doing our best,” she said. “You have got to succeed in doing what is necessary.”
Courtesy of The Age