It’s only a couple of months since mining heiress Gina Rinehart™ used her bizarre award of “Business Person of the Year” to whine at length about how nasty the government was to her. “We need policies that make investment in our country worth doing,” she warned. “Rolling out the red carpet for investment … We need to understand that rolling out the red carpet for investment does not mean increasing government red tape and regulations. It does not mean the overburdened taxpayers paying for lawfare to delay or stop projects.”
Rinehart didn’t say what she thought it did mean, but we’ve got a clearer idea after lithium developer Liontown Resources got $230 million in government agency loans, and Arafura Rare Earths received $840 million in loans and straight handouts to develop a lithium mine and refinery in the Northern Territory.
Now, you won’t believe this, but the Financial Review, normally quick to scold the government for spending money unnecessarily, which barely a week ago complained of “the government-driven saviour economy in which people feel entitled without having to do much for it”, hasn’t uttered a critical word about these handouts.
Rinehart is a beneficiary of both via her ill-timed and now loss-making investments in Liontown and Arafura. Last year, she bought 19.9% of Liontown, which wants to develop a major lithium prospect called Kathleen Valley in central WA, and forced US lithium giant, Albemarle, to abandon a A$6.6 billion takeover of Liontown.
As it turned out, this helped Albemarle avoid what would have been a hugely expensive mistake. Rinehart spent more than $1 billion buying almost all of her shares for around $3, which was Albemarle’s offer price. Liontown was trading around $1.36 on Thursday, so the heiress is down hundreds of millions of dollars.
After Liontown secured the $230 million in Export Finance Corp of Australia and Clean Energy Finance Corporation loans and another $200+ million in private loans, its shares surged to a high of $1.52 before falling back. (Late last year, Rinehart also snapped up an 18.3% stake in lithium-wannabe Azure Resources. Since then, her company has joined with Chinese-Chilean lithium giant SQM to make a $3.71 a share offer. The value of the Azure stake: just over $300 million).
Rinehart’s investment in Arafura Rare Earths began in late 2022 when she took a 10% stake in the company via a share issue at 37 cents a share. Even after shares in Arafura Rare Earths surged more than 77% on Thursday to 28 cents after the $840 million was revealed, she’s still losing money on her Arafura stake.
Fortunately the government, as part of its “critical minerals strategy” (“critical minerals” being a subjective category that risks inflating over time, as the Productivity Commission pointed out) has sent taxpayers to Rinehart’s rescue and rolled out the red carpet for investment — by providing the investment the market should be providing.
Among the Twitterati the complaint is that the government is handing $840 million to Rinehart. In fact it’s giving it to a company she’s invested in, along with a lot of other investors, and some of it will have to be repaid. And you can bet that a lot of the government’s critics actually like the idea of taxpayers investing so that Australia develops an industry further up the production chain than simply digging up lithium and sending it to China, on the basis that we can’t trust China with critical mineral production.
Arafura and Liontown can’t fund their projects because their share is so low — or, in other words, investors weren’t prepared to back them. Why isn’t Rinehart putting in more of her own money, and instead letting taxpayers risk their hard-earned? And at her next speech attacking Labor, will she bother acknowledging just how much red carpet it rolled out for her?
What would our self-made billionaires do if (a) they hadn’t inherited massive iron ore reserves from their ghastly old dad; (b) didn’t have governments kicking in dollops of public money when they overreach?
What sort of environment would we plebs be left living in, if these narcissist overendowed self-indulgent and indulged, spoiled self-entitled corporate plutocratic tyrants – who inherited that wealth – had their way all the time, without legislated limitations on their own overreaching short-sighted greedy desires and expectations?
Who think that because their money buys them access – not enjoyed by the working classes – to the governing classes, they’re entitled to believe they can do whatever they want with the bigger picture, from their tiny corner.
An environment from which their money affords them the means to escape : leaving the little people, to get by, or not.
…. Is it “Gina-Trump Syndrome”?
Funny you should mention Trump. Wonder how much she’ll contribute before November to get “THE Donald” elected. As a WA resident I am insensed at the pathetic royalties these miners pay for a finite resource. When they were originally struck I don’t think anybody envisaged just how many tonnes would be shipped off each year with improved technology.
Not just royalties, there’s also all that ‘donations’ they make to the major parties – to pave their way, over the plebs.
And local outlets skimming across the surface of our ‘architecture of influence’ ignoring the alleged links and funding between a mining heiress and Atlas – Koch Network think tanks in Oz with their faux ‘research’, talking points etc. to stymie and slow any transition to renewables and away from fossil fossils, while allowing miners unfettered access to native lands etc (see The Voice No campaign via CIS/IPA)
Here’s an idea. If the government is going to pump taxpayers money into strategic resources, how about the public gets a share of the ownership rather than wasting it on corporate welfare that won’t be appreciated by its greedy, entitled beneficiary?
last week Dutton flew cross country to attend Gina’s 70th for 40 minutes and now the ALP have bailed her out of buying high and getting stuck low mining shares. Does Gina have a swinging fob watch and a look into my eyes hypnotic trick? Sure is working.
To be fair, these are two of not that many potential lithium mines and it comes as no surprise that Australia’s richest mining shareholder owns shares in both mines.
At the same time though, a better option than giving away our money as a bribe to develop those mines would have been to compensate the shareholders and nationalise them. The whole point of the exercise is to ensure that Australia can mine lithium and hopefully manufacture batteries from it. Based on history the odds are high that once the mines are developed at taxpayers’ expense their owners will sell to a foreign corporation and pocket the proceeds.
Aren’t we a Common Wealth?Let’s share the wealth of our nation.Keep it in common ownership of all Nationalise qnow.Norway does it,so can we.
Here here! We are blessed with natural resources. If the big girls and boys don’t like the rules of a fairer share for us then find another country. Good luck with that.
It doesn’t matter what strategies a Labor government employs to appease Rinehart she will rain on it from a great height. Similar scenario to News Corp, Albanese et al kissing their ring will elicit nothing.
Mr Keane, your concluding two questions can be answered in the negative. Why would Rinehart pay for something when the peasants can be forced to do it for her, and why would she acknowledge Labor’s contribution when it is their duty to roll out the red carpet? At a certain level of wealth that Gina has long passed – a sort of tree line giving way to snow and ice on a large mountain – the rich do not become accountable for anything. To mix the metaphors a little, they are like a mature Tyrannosaur or Allosaur. They are large enough to live comfortable, safe lives by stealing the food from smaller hunters and thus save themselves from the risk and the effort of stalking and chasing prey. They don’t apologise, they don’t feel guilt, they simply take, as is their privilege.