Australia’s richest woman is set to become even richer « Mining Blog

Australia’s richest woman is set to become even richer

18. April 2012,

The world’s richest “mining” woman is set to increase her personal fortune to an unprecedented degree.

On 13 April 2012, Tim Treadgold for the Mining Journal (MJ) published a feature article which led with the startling statement that, while “[g]reat fortunes have been made in mining”, these are “all are being eclipsed by the rise of Gina Rinehart…who has embarked on a course that will change the future of mining, and possibly the future of Australia” .

In late March 2012, Rinehart signed a deal with three Asian steel mills that brought them in as partners on the Roy Hill iron-ore project. Then, two Korean companies, POSCO and STX, teamed up with Japan’s Marubeni, to pay US$3.6 billion for a 25% stake in Roy Hill that, says the Mining Journal, “will cost an estimated US$10 billion to develop and include integrated rail and port facilities”.

Despite this expense, according to Treadgold: “Mrs Rinehart’s profit share in the early years of Roy Hill will be around US$866 million annually, and…it all flows into her bank account. As the mine grows to its targeted 55Mt, Mrs Rinehart’s entitlement grows to 41.25Mt which, if iron-ore prices stay around current levels, swells to an annual profit of US$2.88 billion – personally”.

As of today, “Mrs Rinehart enjoys annualised, personal income of around US$2.05 billion. Roy Hill, at full production, will lift her annual income to around US$4.93 billion.

“Interestingly for followers of wealth (and mining) there is more to come for Mrs Rinehart. Her future fortune could grow substantially when she starts more mines with projects such as Rhodes Ridge, East Angelas, Mulga Downs, Wittenoom and perhaps others given that she has a tenement footprint in the iron-rich Pilbara that is roughly the same size as that held by Rio Tinto.

“There is, however, one big difference in valuing Rinehart’s iron ore – it is all hers, and not shared in the same way, as Rio Tinto’s assets are co-owned by 211,506 investors…

“Numbers, however, tell only part of the Rinehart story…[Her] ambitions go far beyond mere money. She is determined to change the way Australia functions, economically and politically”.

Concludes Tim Treadgold:

“It is Rinehart’s cash flows that ought to have everyone in mining watching carefully to see what she does because it is possible to argue that her extreme wealth…has already had a profound effect on Australian politics, including the controversial super-tax on iron-ore and coal profits.

“Australia has never seen so much wealth accumulate in one person. It has happened in the US with people such as Bill Gates and Warren Buffett, but they are politically benign. When money has been used to influence politics, such a through the oil baron, John D Rockefeller, government was forced to intervene, breaking up vast fortunes.

“Rinehart is accumulating wealth to rival the richest-ever Americans…” For more on Ms Rinehart, go to:

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