Australia’s Richest Woman Seeks Chinese Mine Partners

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Australia’s Richest Woman Seeks Chinese Mine Partners
By Andrew Hobbs, Jason Scott and Stephen Engle
来源：http://www.bloomberg.com/apps/ne ... z454&refer=home


Jan. 22 (Bloomberg) -- Australia’s richest woman, Gina Rinehart, has a team in China seeking partners to finance her second iron ore project and a coal mine, betting the Asian nation will turn around the economy.

“I have confidence that China will get it right and it will be booming again soon,” Rinehart, 54, told Bloomberg Television in an interview at the Perth head office of closely held Hancock Prospecting Pty, partner in the Hope Downs project with Rio Tinto Group. “This dip that we are seeing right now is a great time to focus our thoughts on how we should be doing things better.”

Rinehart, daughter of the man who discovered the mines that made Australia the world’s biggest iron ore exporter, expects to sign partners for both projects this year. She also wants labor laws changed to allow hiring of lower-cost overseas workers to help develop projects to increase the nation’s mineral exports.

China, the world’s biggest steelmaker and buyer of iron ore, is spending 4 trillion yuan ($585 billion) to stimulate an economy that grew at the slowest pace in seven years in the fourth quarter amid a global recession that’s sent commodity prices plunging. The Asian nation wants to keep investing in Australian mines to avoid supply shortages when its economy rebounds, Rinehart said.

“We’ll probably see more of these types of deals from the Chinese this year given current prices,” said Brad Shallard, an equities trader at Bell Potter Securities Ltd. in Perth.

Shrinking Fortunes

Global demand for iron ore, driven by China, made Rinehart and fellow iron ore magnate Andrew Forrest the richest woman and man in Australia, according to BRW Magazine’s annual rich 200 list, which was published in May. Rinehart had personal wealth of A$4.4 billion ($2.9 billion), which may rise more than A$500 million annually because of the development of the Hope Downs iron ore mine in Western Australia, BRW said before the collapse in commodity prices that’s seen fortunes shrink.

Production at both the Roy Hill mine in Western Australia and the Alpha coal project on the other side of the continent in Queensland is targeted to start by 2012, Rinehart said. Western Australia has A$29 billion of iron ore and steel projects being planned or built, according to its government. Australia’s commodity forecaster predicts iron ore exports to rise 52 percent to A$31 billion this fiscal year and expects a recovery in demand for energy and minerals late this year. Chinese government measures to boost demand in the world’s second-biggest automobile market are also positive for steel demand, Rinehart said.

IPO Shelved

To be sure, the deterioration in the global economy prompted Rinehart to shelve plans for an initial public offering of Roy Hill in favor of a sale of less than 50 percent.

“We hope to see an Asian partner in that project,” Rinehart said, declining to disclose whom she’s in talks with. She’s looking to maintain control with a stake of just over 50 percent.

Rinehart is chairwoman of Hancock, founded by her father Lang Hancock, which has already spent A$100 million on exploration at Roy Hill as part of the recently completed financing study. She wouldn’t say what it would cost to develop, though the first stage of the nearby Hope Downs iron ore joint venture with Rio Tinto cost A$1.3 billion to build.

Rio Tinto, the world’s second-largest iron ore exporter, cut shipments by 18 percent in the fourth quarter as steelmakers idled furnaces. Forrest’s Fortescue Metals Group Ltd., which last year started production at an iron ore mine adjacent to Hancock’s Roy Hill, has also failed to meet output targets. Baosteel Group Corp., China’s biggest steelmaker, said last year it may buy a stake in Fortescue to cut reliance on its bigger Australian rivals.

“The crisis is not just an economic one, it’s also a financial one, and it’s got some real teeth,” she said. “From an Australian perspective, so much depends on China.”

China Slowdown

China’s economy grew 6.8 percent in the fourth quarter of 2008, according to figures released today by the statistics bureau in Beijing, the slowest pace in seven years.

BHP Billiton Ltd., the world’s biggest mining company that’s forecasting 8 percent growth, said yesterday the outlook for the world’s third-largest economy was still uncertain. Annual contract iron ore prices will likely fall this year after rising the last six years as China expanded steel output, Rinehart said.

Roy Hill may have an iron ore resource of 1.6 billion metric tons, making it big enough to develop a railroad and dedicated port facility similar to Australia’s three biggest exporters, BHP, Rio Tinto and Fortescue.

Guest Laborers

Developing that kind of infrastructure would be easier in Australia if the government relaxed regulations that bar companies from employing overseas workers at less than Australian minimum wages, Rinehart said.

“It won’t matter so much to Australians what the guest laborers get if they’re employed at worldwide conditions,” Rinehart said. She has written twice to Prime Minister Kevin Rudd, leading the campaign that also has support of companies including Woodside Petroleum Ltd., the nation’s second-biggest oil producer.

Rinehart is also confident of securing a partner for the Alpha coal project in the Gallilee Basin. Exploration is continuing at the resource, which holds in excess of 3.5 billion tons of thermal coal, according to a presentation on Hancock’s Web site.

The size of the reserve, and its location further away from the coast, means Hancock would need a partner to take a greater than 50 percent stake in order to develop it, Rinehart said.

“China and others in Asia don’t want a shortage situation,” Rinehart said. “Most of these mines, you can’t just increase their size at the flick of a button.”

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