Mining magnate Gina Rinehart digging deep for mega profits

Article by John Stensholt, courtesy of The Australian


What a year it has been for Gina Rinehart.

With iron ore prices surging for much of the year and an improvement in its production, Rinehart’s Hancock Prospecting doubled its net profit to a whopping $2.6bn for the 12 months to June 30.

That result showed just how quickly Hancock has grown in only a few years. The company, of which Hancock owns about 76.55 per cent directly, achieved revenue of $1.6bn in 2016 – or about $1bn less than its profit this year – and a net profit of $443m that year.

It means Hancock’s net profit has leapt about six times in only about 36 months. Revenue has jumped to $8.4bn in the same time.

But an analysis of several of the subsidiaries of Hancock that form part of the company’s overall balance sheet shows Rinehart has made several canny deals and acquisitions in recent years.

Rinehart’s wealth was estimated at $13.12bn when The List – Australia’s Richest 250 was published by The Australian at the end of March, based in part on Hancock’s financial results last year.

Her after tax profit compares with the $4.7bn result for the listed Fortescue Metals Group, chaired by fellow billionaire Andrew Forrest. FMG currently has market capitalisation of about $28bn, meaning’s Rinehart’s wealth valuation is on the way up if it was calculated on a comparative basis.

There was a time when Hancock made most of its money via payments that flow through its Hope Downs iron ore joint venture with the listed Rio Tinto, but Rinehart’s cherished $US10bn ($160bn) Roy Hill iron ore mining operation is now well and truly up and running and making good money.

Now 70 per cent owned by Hancock, Roy Hill made a $1.38bn profit for the 2019 financial year – or about the level of profit the overall Hancock group made a year earlier – from revenue of $5.16bn. Roy Hill also has about $5.6bn assets on its balance sheet.

Rinehart secured a massive debt funding package worth more than $US7bn back in 2014, the largest mainland resource debt funding deal in the world, and Roy Hill made its first shipment of iron ore from Port Hedland in December 2015.

Deal breaker

Separate accounts for many of the other companies owned by Hancock also show how good her timing has been.

Take last year’s acquisition of the formerly ASX-listed Atlas Iron, which has port capacity at Port Hedland. Hancock paid $418m in a deal that was finalised in November last year.

At the time, Atlas was coming off a 2018 year for which it had posted a $166m net loss that included an impairment of $92m due to challenging market conditions.

But the 2019 Atlas accounts show just how well it has performed. Net profit was $142m and revenue rose from $546m to $702m, while operating costs fell from $586m to $513m.

A month after Hancock bought Atlas Iron, in December 2018, Japan’s Marubeni Corporation – which owns 15 per cent of Roy Hill – bought 1 per cent of it for $4.5m to give Atlas a valuation of $450m, but it could be worth more than $850m now based on its 2019 financial result.

In May, Hancock secured Canadian coking coal prospect Riversdale in a $744m deal. Riversdale already has more than $150m in net assets on its balance sheet.

Hancock said it has about $259m in listed equities. One good share investment has been ASX-listed gold explorer Catalyst Metals. Rinehart paid $13m for an 11 per cent stake in March, which is now worth more than $21m.

Rinehart is also one of the biggest agricultural land holders in Australia, both via the Outback Beef cattle business, two-thirds owned by Hancock and the minority stake held by China’s Shanghai CRED, and Hancock Prospecting itself.

According to AgJournal, Hancock owns at least 2.22 million hectares across more than 14 properties in Western Australia, the Northern Territory, Queensland and NSW and is the nation’s second-largest producer of beef.

Hancock’s balance sheet shows almost $300m worth of livestock across both current and non-current assets and $137m in agriculture revenue in 2019.

Outback Beef cut its losses from $20m to $15m, according to its 2019 financial report, and it has net assets of $352m.

Mining’s digital ‘sweet spot’

Article courtesy of Australian Mining

23 October 2019


As mining companies face increased pressure to optimise operations, industrial software company AVEVA is perfectly placed to provide the next wave of innovative solutions.

The next leap in productivity at mine sites is set to stem from advances in the dynamic technology market, as operators figure out new ways to optimise output from assets.

While mining companies are already beginning to introduce a broad range of innovative solutions to maximise productivity, reduce costs, and improve safety, including artificial intelligence (AI), mixed reality (XR) and the Internet of Things (IoT), there is a race of sorts in the tech industry to constantly provide the next advancement.

AVEVA, which has built a strong reputation in the mining industry with its software platforms, is leading the way in providing digital technology that spans companies’ global portfolio across operations and asset lifecycles.

Its solutions unify data from first engineering designs to operations, analysing and managing engineering information, processes and supply chain, so that companies can maximise productivity, reduce downtime using predictive analytics, and bring new projects online faster and more cheaply.

Against the backdrop of global uncertainty and a volatile commodity market, AVEVA is in a “sweet spot” as mining companies become increasingly demanding for innovation in digital technology, according to head of Pacific Zone, Damien McDade.

“At AVEVA, we encompass industrial Internet of Things, artificial intelligence, alternative realities and virtual reality all together within a unified operational lifecycle platform that can help companies maximise profitability, minimise risk and enhance automation and control,” McDade explains.

“You only have to look at a world-leading mining company like Roy Hill, based in Perth. They have embraced AVEVA’s solutions to create a remote operating centre that spans the entire mining value chain.

“Not only does this enable their team to optimise their efficiency from pit to port, but it also dovetails perfectly with their global supply chain, ensuring that they can pinpoint revenue opportunities before they arise, and scale their operations to fit. This innovative approach is adapted from a concept first developed in the oil and gas industry, but it’s a flexible model which all mining operators can benefit from.

“This is our sweet spot and opportunity. Typically, across the board, the mining industry is trying to squeeze more out of assets and empowering its workforce through digitisation. This is where we come into play.

“Our technology can help companies increase operational efficiency and give their teams better data on which to base their day-to-day and strategic decision making. Those two things together can transform return on investment and sharpen operational focus.”

McDade and the team will be at AVEVA’s World Conference in Brisbane (at Howard Smith Wharves) on November 19-20.

With leading practitioners from around the globe and subject matter experts as speakers, the AVEVA team will offer Australian users a snapshot of the technology future, showing customers and industry peers what the company is working on.

Some of the company’s top partners will also be able to showcase their capabilities, including Stratus Technologies and Callisto.

“We believe we have some of the best industrial software and we want people to see the very latest, relevant content,” McDade says.

Much of the discussion will revolve around digital engineering, operations centres, asset predictivity, and cloud operations, which is the next leap in information storage and analytics.

While cloud-based analytics are available today, mining companies are only using it for what McDade describes as “non-critical infrastructure”, to be put simply – information that, if lost, wouldn’t be catastrophic.

The big question AVEVA challenges the mining industry with is “are you truly ready for cloud?

Embracing the full potential of cloud-based operations will require a reorganisation of how many traditional mining companies operate, but AVEVA has numerous concrete examples of the benefits this can bring, including at Roy Hill’s base in Perth.

AVEVA will also showcase its hybrid model, which allows mining companies to take noncritical performance information to the cloud and leave critical infrastructure on its current systems.

This progression is just one of the company’s bold plans for how digital technology can benefit Australian mining companies. These are available today, capitalising on Australia’s track record of leading the way in innovative technology, according to McDade.

“It comes down to what it takes to make a business stand up in Australia in terms of cost of doing business – other countries would argue that the competitive cost base we have here is due to technology, which Australian companies are often the first to introduce,” McDade says.

While AVEVA works across a range of industries, mining accounts for a significant proportion of business, which justifies its recent announcement that Brisbane will be the new base for its Pacific region headquarters.

The city offers a central location and is described by McDade as an emerging “tech hub”, making the decision a logical one.

From its Brisbane base, AVEVA intends to ramp up a focus that spans across a broad range of mining and other industrial companies’ operations, such as value chain optimisation, which allows for visibility across the entire value chain, from planning to scheduling to inventory.

Optimisation also extends to mining companies’ production data, which AVEVA turns into insights with downtime analysis, delay accounting and process optimisation.

Critical to companies maximising productivity is also the management of asset performance, with AVEVA offering tools that predict potential equipment failures so they can be planned for and averted, alongside digitising operating procedures and maintenance activities as part of a holistic approach to engineering, operations and maintenance, all based on unified, accurate and up-to-the minute data.

This provides a glimpse into the potential offered by digital mining at a time where companies are under increasing pressure to maximise productivity amidst volatile market conditions.

AVEVA is in the perfect position to capitalise on Australia’s dynamic mining market, with the nation’s reputation as the epicentre of resources technology only continuing to grow.

Roy Hill continues to champion the need to cut red tape

Roy Hill continues to champion the need to cut red tape in order to reduce the regulatory burden on business.

The Institute of Public Affairs has released a video highlighting just how enormous the issue is, identifying not only red tape that’s created through the legislative process as a problem, but the implications of government delegating power to make regulations to regulatory bodies.  Watch the video here.

Roy Hill mine continues cancer awareness campaign with pink delivery


NEWMAN, Western Australia. August 15, 2019. UK-based Trans Global Projects Group (TGP) has delivered a shipment of 62 modules weighing 68,000 tonnes to the Roy Hill iron ore mine near Newman in Western Australia.

Roy Hill, owned by privately-held Hancock Prospecting, encourages its suppliers to paint their equipment pink in support of breast cancer awareness. In 2018 Berge Bulk showed its support by painting the superstructure of its 210,000 DWT iron ore carrier Berge Toubkal pink.

According to Hancock executive chairman Gina Rinehart, with a net worth over US$15 billion, breast cancer is Australia’s most commonly diagnosed cancer and now affects nearly one in eight Australian women.

Rinehart established the practice of painting Roy Hill mining equipment pink in recognition of cancer sufferers and naming them after employees. In May this year it christened two more 296-tonne capacity Hitachi mega trucks with the names of two female cancer survivors.

Speaking at the ceremony (pictured) Rinehart said 42 percent of the mine’s truck drivers are women – a record in the Australian mining industry.

To deliver the latest pink mining equipment, TGP shipped the modules from Dalian to Port Hedland and after “intensive” biosecurity checks they travelled a further 400 kilometres on a single lane road to the Roy Hill site.

“Through expert planning, innovative engineering and careful coordination, our team was able to successfully deliver these modules, despite the particularly challenging conditions,” commented TGP CEO Colin Charnock, “We are very proud to have helped our client support such an important cause with the delivery of these pink modules. Thanks to the diligent and tireless efforts of our team, these modules will now help the mine further demonstrate its commitment to breast cancer prevention, diagnosis, treatment and survival.”

In addition to project logistics management, TGP services include ship chartering, logistics consultancy and transport engineering.


Article courtesy of Freightweek.