Gina Rinehart’s Roy Hill mine makes $3.2 billion profit in 2021-22

Australia’s richest person, Gina Rinehart, has made a profit of $3 billion from her largest iron ore mine, despite China’s lockdowns hurting demand for steel-making minerals.

The billionaire’s Roy Hill mine in Western Australia’s remote Pilbara region announced a profit in the 2021-22 financial year.

But it revealed that after-tax earnings of $3.2 billion were 28 percent weaker compared to the prior fiscal year due to declining iron ore prices.

However, this has not threatened Mrs Rinehart’s position as Australia’s richest man or woman, as her Roy Hill mine exported 60 million tonnes of iron ore for the first time in the past financial year.

Ms. Rinehart also serves as executive chairman of Hancock Prospecting, a large private corporation with mining and livestock interests that owns 70 percent of Roy Hill Holdings.

She was number 1 on this year’s Australian Financial Review Rich List, with her estimated fortune of $34 billion putting her ahead of fellow iron ore miner Andrew Forrest and Atlassian software co-founders Mike Cannon-Brookes and Scott Farquhar.

Australia’s billionaires have had a tough year, from China’s lockdowns to higher global interest rates, as the worst inflation in decades squeezes the cost of living for low-income earners.

China’s strict Covid-zero policy has hit global demand for the raw material used to make steel, with spot prices for iron ore falling 36 percent since March from $157 a ton to just $101 a ton now.

In an interview with CEO Magazine, Ms. Rinehart did not mention Chinese Communist Party President Xi Jinping as one of her inspirations.

But she had many kind words for Indian Prime Minister Narendra Modi, the leader of the world’s largest democracy, whose country is a major consumer of Australian coal.

Indian mining giant Adani started shipping coal from its Carmichael mine in central Queensland last year.

Westpac senior economist Elliot Clarke expects Chinese coal demand to peak in the second half of the 2020s, making India a more important market for Australian coal exporters.

“While China has continued to expand its coal-fired capacity, power generation by the subsector has grown only marginally in recent years,” he said.

“In stark contrast, solar power generation in China has grown more than six times since 2015 and nearly tripled in size.”

Significantly, Ms. Rinehart pointed to her late father Lang Hancock as one of her inspirations, but then went on to explain that three decades ago she had a tough job returning his business to profitability following his death in the aftermath of a recession.

“When I became executive chairman in 1992, our corporate group was in a very difficult situation,” she said.

“We faced significant financial difficulties, with some related companies going out of business, and the few remaining assets were mostly mortgaged to the limit or facing legal challenges.”

An advocate of the free market economy, Ms. Rinehart is also inspired by former US Republican President Ronald Reagan and former British Conservative Prime Minister Margaret Thatcher.

She is also inspired by leaders who have guided their nation through an existential threat, such as nominating World War II British Prime Minister Winston Churchill and Ukrainian President Volodymyr Zelensky, who led his nation through the Russian invasion.

Ms. Rinehart, who is also the executive chairman of Roy Hill Holdings, noted that the $2.8 billion her company has paid in corporate taxes and royalties from the state has helped fund public services.

“If mining is doing well, Australia is doing well,” she said in a company statement.

“Again, the significant contribution Roy Hill and mining in general make to the country has been highlighted: creating jobs and opportunities, boosting the economy through Covid and contributing to health, defence, policing, our the elderly, infrastructure and more.’