Rinehart secures A$7.9b for Roy Hill
Australian billionaire Gina Rinehart's lifelong ambition to fulfil hers and her father Lang Hancock's dream to build their own iron ore mine will become a reality.
Last night, Rinehart signed a US$7.2 billion ($8.4 billion) debt package to bankroll the Roy Hill iron ore project.
It was a momentous occasion and marks almost 62 years since Lang Hancock made the famous flight of discovery of one of the biggest iron ore deposits in the world then spent the rest of his life trying to convert it into a mine.
In a press pack released today, no doubt driven by Rinehart, a collage of newspaper headlines with negative connotations that she wouldn't be able to pull off Roy Hill were put on show to rub the naysayers' noses in it.
There has been talk since February that the debt package was ready to go, but an announcement was delayed until Thursday night. The speculation is that a settlement with two of her four children, John Hancock and Bianca Rinehart who are suing her over the A$5 billion family trust, is now imminent.
Given the project was already 30 per cent complete in terms of construction, and the number of contracts Roy Hill has been letting in the past year, it had got to the point of no return. It has spent a fortune building an enormous camp, processing facilities, rail and port. If the project didn't get financing, billions of dollars in equity would have been lost.
For various reasons the project is way behind schedule for first production, which was originally set for 2013, then pushed out to 2014 and more lately to September 2015. Industry experts believe it is more likely to be 2016.
It has also been surrounded by secrecy and lack of transparency, which resulted in a lot of scepticism that there were problems with the project.
Some described the process as "chaotic" as tenders were sent back time and time again for cheaper deals.
Rinehart at various times has blamed the delay on the legal action with her children, launched in September 2011, to remove her as trustee of the A$5b family trust, alleging gross misconduct in her role as trustee.
The trust was due to vest on September 6, 2011, when the youngest daughter Ginia turned 25. The trust would make each of the children billionaires in their own right. But they have had little access to their inheritance since Rinehart took over from her father as trustee when the children were minors.
It is little surprise that Rinehart picked Singapore as the place of choice for the pomp and ceremony befitting the signing of the much anticipated debt package that will fund her A$10b Roy Hill iron ore project.
Rinehart has bought property in Singapore and in many of her writings waxes lyrical about its investment-friendly nature.
"Despite the country's small size, low population and lack of resources and local water supply, Singaporeans benefit significantly from the country's policies,'' she wrote in Australian Resources & Investment in 2011. ''Its neighbour Australia is the complete opposite.''
Sydney Morning Herald