Rinehart reaps $2.3b dividend from Roy Hill

Gina Rinehart’s flagship mining company Roy Hill Holdings will add another $2.31 billion to what is already Australia’s biggest fortune despite weaker iron ore prices impacting her flagship iron ore mine.

The Roy Hill mine, controlled by Mrs Rinehart’s Hancock Prospecting, reported full-year net profit after tax of $3.2 billion on Tuesday, down 28 per cent on the previous financial year on the back of lower prices for the steel-making ingredient.

Roy Hill declared a dividend of $3.3 billion which will be shared among equity partners Hancock Prospecting with a 70 per cent stake, Marubeni (15 per cent), POSCO (12.5 per cent) and China Steel Corporation (2.5 per cent).

Mrs Rinehart already sits on top of The Australian Financial Review Rich List with a fortune of $34 billion thanks largely to the success of Roy Hill in recent years.

Roy Hill said it paid $2.8 billion in corporate income tax and state royalties over 2021-22 when it shipped a company record of more than 60 million tonnes of iron ore to international customers.

Mrs Rinehart thanked the Roy Hill mine workers and staff for “another great year” and repeated her mantra that when mining does well, Australia does well.

“Once again, the significant contribution Roy Hill and mining in general makes to the country has been highlighted – creating jobs and opportunities, powering the economy through COVID and contributing to health, defence, police, our elderly, infrastructure and more,” she said in reference to the business itself and tax and royalty payments.

Roy Hill paid $761 million in state and native title royalties and $2.1 billion in corporate income tax in the 12 months to June 30.

The company said it paid suppliers and contractors $2.3 billion, with the majority flowing to local suppliers.

Roy Hill has been a huge money spinner for Mrs Rinehart, who father Lang Hancock was a pioneer of the iron ore industry in WA but never achieved the dream of owning and operating a mine.

The mine paid down a $10 billion debt and declared a maiden dividend of $475 million in 2020, just five years after making its first iron ore shipment out of Port Hedland.

Mrs Rinehart only took up the leases that underpin the Roy Hill operations in WA’s iron ore-rich Pilbara in 1993.

Roy Hill invested $683 million new capital in 2021-22, including the purchase of the Pilbara’s first battery-powered locomotive which is scheduled for delivery in 2023.

The miner took another crack at the Albanese government’s industrial relations changes in releasing in its results, backing up attacks from Mrs Rinehart and Hancock Prospecting-owned Atlas Iron over the past week.

“Productivity improvements remain the only sustainable way of being able to improve real wages, rather than regressive industrial relations changes which put further investment and new projects at risk and importantly risk negatively impacting the positive relationship between employers and employees in the mining industry, which is fundamental to the collaborative and co-operative environment needed to deliver improved productivity,” Roy Hill said.

The Roy Hill warning on the government’s IR agenda came a day after Atlas Iron doubled down on Mrs Rinehart’s criticism.

Atlas chief executive Sanjiv Manchanda said a strike in WA’s iron ore-rich Pilbara region would hurt indigenous communities as well as hit businesses, trade, government income from taxes and royalties.

“For instance, even a six-week strike in the Pilbara would result in a loss of $15 billion or more, reducing tax revenue, royalties and payments to the indigenous peoples who rely on such payments,” he said.

Atlas Iron delivered a $225 million maiden dividend to Hancock Prospecting, the first since Mrs Rinehart prevailed in a three-way battle with Andrew Forrest’s Fortescue Metals Group and Chris Ellison’s Mineral Resources for control of the then ASX-listed miner in 2018.

The dividend came despite the same a big drop in profit in the year to June 30 blamed on the same slide in iron ore prices from record highs that hit Roy Hill.

Atlas said the average realised price for its iron ore fell to $US107 a tonne in 2021-22, down from $US134 a tonne in the previous year.

The company reported a $302 million profit, down from $938 million, and revenue of $1.32 billion compared to $1.7 billion a year earlier.