Australia’s richest person Gina Rinehart has added to her wealth after her mining company Hancock Prospecting reported a 50 per cent surge in profit on the back of soaring prices for iron ore.
Days after Mrs Rinehart topped the Financial Review‘s 2020 Rich List with an estimated $29 billion fortune, financial accounts reveal her private company’s after-tax profit climbed from $2.6 billion to $4 billion in the past financial year.
While many of Australia’s top export commodities such as coal and liquefied natural gas have faced sharp falls due to various impacts of the coronavirus pandemic, iron ore has soared and remains above $US110 a tonne, providing a windfall to mining giants such as Fortescue, BHP, Rio Tinto and Hancock Prospecting’s majority-owned Roy Hill.
The price of the steelmaking raw material has been lifted by strong demand from China’s steel mills – ramping up output to stimulate the economy – and softer-than-expected output from overseas iron ore producers, such as Brazil’s Vale. China is by far the world’s top consumer of iron ore, buying more than 70 per cent of seaborne cargoes.
Hancock Prospecting’s principal activities across the year included the mining and sale of iron ore through the Roy Hill iron ore project, its half share in the Rio Tinto-owned Hope Downs joint venture and its shareholding in Atlas Iron, which runs the Mt Webber mine, according to Hancock’s directors’ report. The group continued to explore and progress the approvals process for the Grassy Mountain metallurgical coal project in Canada’s Alberta.
According to the Financial Review Rich List, Mrs Rinehart’s wealth has more than doubled in the past year to $29 billion. Australia’s second wealthiest person was fellow iron ore mining magnate Andrew “Twiggy” Forrest with $23 billion.
Hancock Prospecting declared a dividend of $710 million, up from $483 million last year.
Elsewhere in Australia’s $290 billion mining industry, exporters of coal and copper this week are facing uncertainty surrounding their ability to sell cargoes to China following reports of Chinese customs authorities implementing a new round of import curbs targeting Australian cargoes. Australia’s wine, barley, beef and coal exports have previously faced restrictions this year amid escalating diplomatic tensions between Canberra and Beijing.
Iron ore, however, has emerged “largely unscathed” from the fallout, Commonwealth Bank mining and energy commodities analyst Vivek Dhar said on Thursday.
“China’s steel sector is too dependent on Australian iron ore for policymakers to force the sector to find another source of supply,” he said. “Diversifying away from Australia in the near term is even more challenged with Brazil, the world’s second-largest supplier of iron ore, operating below potential. Brazil’s supply has still not fully recovered following a fatal dam collapse in January 2019.”
Source: Thanks smh.com