William Finnegan: Gina Rinehart, Australia’s Mining Billionaire : The New Yorker
Australia, thanks largely to the economic rise of China, has been in the throes of a mining boom. The “lucky country,” as it is called, has enormous deposits of the high-grade iron ore required by the steel mills of Asia. In Western Australia, where most of the iron ore resides, the boom has created unprecedented prosperity, along with a small tribe of billionaires. Georgina (Gina) Hope Rinehart, who owns a company called Hancock Prospecting and has recently been buying up Australian media properties, is the best known of these new tycoons. According to BRW, a weekly business magazine, Gina Rinehart became the richest woman in Australia in 2010, the richest person in Australia in 2011, and the richest woman in the world in 2012, with an estimated net worth of nearly thirty billion dollars. Rinehart, who lives in Perth—the state capital of Western Australia—is fifty-eight, a widow, and a mother of four. She shuns the press and rarely appears in public. She is sensitive, however, to the media treatment she receives, which is voluminous—she qualifies, by sheer quantity of ink, airtime, Web sites, pop songs, and pub conversation devoted to her, as a national obsession—and often rough. Two things seem to hurt her particularly: the stock news description of her as an heiress, and perceived failures of the press to acknowledge the achievements of her late father, Lang Hancock, whom she adored (when they were not feuding) with a rare intensity.
Lang Hancock was a piece of work. He started out as a rancher, asbestos miner, and prospector in the Pilbara, a vast sweltering wilderness in northwest Australia. (It is pronounced as two syllables: Pilbra.) In November, 1952, according to legend, he was flying in a flimsy little Auster aircraft with his wife, Hope, over the Hamersley Range, an extra-remote fastness in the Pilbara. A storm arose. Unable to climb through the clouds, they threaded narrow gorges in lashing rain. Hancock, an expert bush pilot, managed to note the rust color, brought out by the rain, of the gorge walls, which, as he later told Australian television, “showed it to me to be oxidized iron.” He returned to the spot in better weather and started laying the foundation of a mining fortune. He did this not by mining but by prospecting, along with an associate named Ken McCamey, and by tirelessly lobbying the state and federal governments to repeal an embargo on the export of iron ore and a ban on the pegging of claims. When the repeals finally came, in the early nineteen-sixties, Hancock staked his claims and, after more rounds of badgering, persuaded mining executives from Britain and the United States to invest in the Pilbara. His royalty agreement with Rio Tinto, a London-based multinational, soon made him a multimillionaire. The big customer in those days was Japan.
Unlike his daughter, Hancock actively engaged the press. He told his story to any reporter who would listen. He even started two newspapers, as megaphones for his political views. He was an ardent Western Australia secessionist. Historically a poor, backward, isolated state—Robert Hughes described it, in “The Fatal Shore,” as “a colony with a body the size of Europe and the brain of an infant”—Western Australia could become, with its new mining wealth, Hancock believed, a paradise of free enterprise if it could only escape the stifling grasp of the eastern establishment in Sydney and Melbourne. Hancock wanted to use nuclear weapons for mining and for dredging new ports along the northwest coast, but there was no bloody chance of getting such bold ideas approved by the timid federal bureaucracy, in Canberra. He didn’t fear radioactive fallout any more than he believed asbestos exposure caused asbestosis or the cancer mesothelioma. The blue-asbestos mine that Hancock ran in the nineteen-thirties and forties at Wittenoom is thought to have caused hundreds of asbestos-related deaths, many of them among its largely Aboriginal workforce, but Hancock never accepted the medical connection, let alone responsibility. He held an extreme version of a common attitude among white Australians of his generation toward native people. He once told a television interviewer that the “problem” of “half-castes” could be solved by luring people to a central welfare office, to “dope” their water in order to sterilize them and thus wipe out the race.
Gina was Lang and Hope Hancock’s only child. Lang had expected a boy, whom he planned to name George, for his father. He took to calling Georgina “young fella” or “my right-hand man.” He and Gina were exceptionally close. When she was small, they lived in the Pilbara, forty miles north of Wittenoom. On Saturdays, they flew six hundred miles to buy groceries. After Hope developed breast cancer, the family moved to Perth to be near a good hospital. Gina boarded at a girls’ school, where her fellow-students remember Lang sometimes coming in a Rolls-Royce to spend the afternoons talking with his daughter in his car. When the BBC made “Man of Iron,” a documentary about Lang, in 1966, a film crew went to the school to interview twelve-year-old Gina. “I think my father is nearly perfect,” she said. “I think he’s quite handsome, except a bit fat.”
Hancock’s obsession with mining and the Pilbara—for decades, he struggled, in vain, to find backers to develop his own iron-ore mine—was transferred intact to his daughter. He took her with him, even as a child, to business meetings all over the globe, to the bemusement of bankers and sheikhs. Tim Winton, the Western Australian novelist, says that Gina’s childhood seemed to be a “science experiment,” conducted inside a “regal bubble.” When she was old enough to drive, Lang is said to have had ten new cars brought to her school for her to choose among. One of Lang’s biographers, Robert Duffield, having been commissioned to write a newspaper article on Gina, then twenty-two, as the “richest girl in Australia,” found her interested only in minerals. Gina “tries to be nice to everybody,” Duffield wrote. But “if they disappoint her, or annoy her, or in any way seem to threaten her, the friendly filter on the opal-clear eyes drops to reveal a more steely blue.” While Gina was still in her teens, her famously gruff father said, “She’s a lot tougher than me.” Gina went to the University of Sydney but lasted only a year. She objected to the lectures of a left-wing economics professor, found she had nothing in common with her classmates, and returned to Perth and her life’s mission in what she called, with deadly earnestness, the House of Hancock.
But Gina and her father began to clash. She married twice, and had two children with each husband. The first was a young employee of the family firm, whom Gina soon divorced. The second was an American lawyer, Frank Rinehart. He was thirty-seven years older than Gina. According to “Gina Rinehart: The Untold Story of the Richest Woman in the World,” a new biography by Adele Ferguson, Frank had been convicted of tax fraud in the U.S. and disbarred. Lang thought that he had his eye on Hancock Prospecting. After Hope Hancock died, in 1983, and Gina chose to contest her mother’s will, Lang saw Frank Rinehart’s hand behind the effort and was enraged. Worse, from Gina’s point of view, her father took up with Rose Lacson, a young housekeeper from the Philippines whom Gina had hired. The Rineharts tried to get Lacson deported. In an exchange of letters between father and daughter that later surfaced in court, Gina told Lang that he had become a laughingstock. Lang bitterly asked Gina to “allow me to remember you as the neat, trim, capable and attractive young lady” that she had been, rather than “the slothful, vindictive and devious baby elephant that you have become.” She was “grossly overweight,” he wrote. “I am glad your mother cannot see you now.” Hancock married Lacson and built her a white-pillared water-view mansion called Prix d’Amour. They went on a round-the-world honeymoon in his Learjet. Gina saw her inheritance being frittered away. Meanwhile, her father hurled himself into a series of ill-advised business ventures, including a failed barter deal with Nicolae Ceauşescu’s Romania.
Frank Rinehart died in 1990, Lang Hancock in 1992. Gina and her stepmother fought in the courts over Hancock’s estate for eleven years. Rinehart, alleging that Rose was somehow responsible for her father’s death, eventually forced an official inquest. A coroner found, for a second time, that Lang had died of natural causes. Meanwhile, Rinehart was found to have paid, through a private investigator, up to two hundred thousand dollars each to inquest witnesses who offered testimony, much of it dubious. There were allegations of adultery, witchcraft, and attempted murder-for-hire. Rinehart denied wrongdoing, saying that the money had been for expenses and protection, and the government declined to press charges. If Rinehart had not loathed the press earlier, she surely did before her battle with her stepmother was over. The lurid charges traded back and forth made great copy. The long fight ended with Rose keeping a few assets, including Prix d’Amour, while Rinehart retained sole control of Hancock Prospecting and its ever-increasing royalty stream.
“YOU VS. GINA RINEHART,” the banner headline reads on howrichareyou.com.au. The site invites you to enter your annual salary. If you enter sixty thousand dollars, it informs you that Rinehart makes that amount every 1.7 minutes. Below that, a rapidly increasing number calculates how many hundreds of thousands have “landed in Gina’s pocket” since you landed on this Web site. Finally, “Guess who made $107,703 sitting on the toilet today?” Not you. Among the things that her estimated 2011 income could buy: three fully armed Nimitz-class nuclear aircraft carriers; “Jamaica.”
The sheer distorting weight of Rinehart’s wealth is perhaps best understood in relative terms. The American economy is ten times the size of Australia’s, so in the United States an individual fortune equivalent to hers in relation to the national economy would be somewhere around two hundred billion dollars. That is roughly the combined net worth of the four richest Americans. Or seven Michael Bloombergs.
Australians are not known for their deference to the moneyed. I once worked as a pot washer in a casino restaurant in New South Wales. It was a big kitchen, and the pot washers were at the bottom of the job ladder, below even the dishwashers. And yet we made an excellent wage and, as employees, we had entrée to the casino’s private members’ bar, which was on the top floor. We would troop up there after work, tired and ripe, and throw back pints among what passed for high rollers on that part of the coast. Once or twice, my co-workers spotted the owner of the casino in the members’ bar. They called him a rich bastard, and he, in turn, bought us all drinks.
That was 1979. Australia, to my enchanted eye, was a country full of wisenheimers, smart-mouthed diggers with no respect for wealth or authority. Jack’s as good as his master, the saying went—and “probably a good deal better,” Russel Ward wrote in “The Australian Legend.” This skeptical, irreverent, proud self-image was rooted in the early experience of convicts transported from Britain and, later, in labor conflicts with landowners and industrialists. Australia was the land of the fair go—of equal opportunity, and a fair day’s pay for a fair day’s work. People used to make fun, in the nineteenth century, of the “bunyip aristocracy”: nouveau-riche Australians who wanted to settle themselves on top of the colonial social heap.
All that is changing. Inequality is on the rise. The share of income going to the top one per cent in Australia has doubled since 1979. (It is still less than half the share going to the top one per cent in the United States. Sixty years ago, the two countries were, by this metric, nearly the same.) According to many critics, including leaders of the current Labor government, Gina Rinehart and her fellow-billionaires pose a direct threat to Australia’s egalitarian tradition.
In 2010, the Labor government introduced a super-profits tax on minerals, hoping to capture more of the mining boom’s lucre for the public purse. Rinehart and her colleagues funded a huge publicity campaign, unprecedented in Australia, against the tax. Rinehart herself, normally so press-shy, stood on a flatbed truck in Perth, wearing a string of pearls, and shouted to a crowd, “Axe the tax!” Within weeks, Kevin Rudd, then the Prime Minister, had been deposed by the right wing of his own party. His replacement, Julia Gillard, came up with a mining tax so watered-down that two of the biggest mining companies operating in Australia have paid nothing to date.
Hancock Prospecting is actually a small company, with some forty employees at its offices in Perth. It collects royalties, looks for minerals, stakes claims, negotiates deals. It litigates, prodigiously, but uses outside counsel. It has no press office. Publicists have been retained as consultants, but never seem to last. The company’s headquarters are in a modest building in a quiet neighborhood in West Perth. By contrast, BHP Billiton, the world’s largest mining firm, occupies thirty-four floors of a forty-five-story building in downtown Perth, and that’s just for its local operations.
Gina Rinehart’s wealth has many sources, starting with her inheritance of Hancock Prospecting, which was worth about seventy-five million dollars, and the old Rio Tinto royalties, which were roughly twelve million a year when her father died and, with increased production and a soaring iron-ore price, have since grown wildly. These royalties will be paid in perpetuity. Rinehart inherited or has acquired the rights to some of the largest mineral leases in the Pilbara, believed to contain billions of tons of minable reserves of iron ore. Hancock Prospecting owns fifty per cent of an iron-ore mine at Hope Downs, in the Pilbara, which opened in 2007. It is operated by Rio Tinto and pays Rinehart’s company, at current prices, around two billion dollars a year. Hancock Prospecting may be minuscule compared with the multinationals, but its value is enormous and Rinehart controls all its shares.
Calculating Rinehart’s net worth is an exercise in extrapolation. When Citigroup compiled a list, in 2011, of the world’s ten largest mining projects expected to come into production soon, three were Rinehart’s. Two are coal in Queensland, and she has since sold stakes in those to an Indian conglomerate in a deal worth more than a billion dollars. The third, which industry analysts expect to produce an annual income of nearly three billion dollars for her, is Roy Hill, a large iron-ore mine that she is now building in the Pilbara and plans to operate herself, fulfilling her father’s frustrated dream.
Is she an heiress? Inarguably. And yet she has, by hard work and guile and historic luck, multiplied the value of the business she inherited several hundred times over. The “h”-word seems to be partly a gender thing. The male scions of Australian family fortunes, such as Lachlan Murdoch (the eldest son of Rupert), are not routinely described in the press as heirs. Rinehart is the only woman among the rough lot riding the mining boom at tycoon level, and none of the others probably have to read much in the papers about how they really should be able to afford a hairdresser or a personal trainer. Neither do they see, on national television, a beloved comedian, Barry Humphries, demonstrating the alarm with which he would react to waking up next to her in a motel.
Even at 6 A.M., Perth Airport teems with sunburned miners in high-viz safety vests. They’re FIFOs (fly-in, fly-out workers), all heading to the Pilbara or the gas fields off the northwest coast. They pull twelve-hour shifts seven days a week for two or three or four weeks, then go home for a week. They commute not only from Perth but from Sydney, Melbourne, New Zealand, Bali. (Bali is closer to Perth than Sydney is.) They make excellent money: a truck driver can earn more than a hundred thousand dollars a year, and an experienced welder, a hundred and fifty thousand. Much of the work is dirty and dangerous, though, and the strain on families is severe.
A thousand miles up the coast from Perth, iron dust coats Port Hedland—a hot reddish blanket thrown over strip malls and mangroves, company-truck fleets and great dirty piles of salt. Ancient-looking, iron-stained conveyor belts lattice the badlands. Ore crushers and stockpiles the size of a respectable range of hills all swim in the tropical heat. The longest, most monotonous trains I’ve ever seen—three hundred-plus identical gondolas, having travelled down from distant Pilbara mines, piled high with iron ore—creep slowly into an enormous shed, where a rotary car dumper seizes and rolls them. Bulk-carrier ships hunker like squared-off stadiums beyond the evaporation ponds.
Port Hedland seems, at first glance, sleepy, stunned. But it is the largest bulk-minerals-export port in the world. Iron ore is its mainstay, and the iron-ore business is all just-in-time logistics. Those ships cannot be kept waiting for a berth. Their demurrage is around twenty thousand dollars a day. They need to be loaded as fast as possible with the precise ore blend ordered by the customer in Shandong, and they need to leave on the next tide. Rio Tinto has an operations center in Perth, with a staff of five hundred coördinating shipments in real time. It operates fourteen mines in the Pilbara, with a thousand miles of rail and a hundred and sixty locomotives, twenty-four hours a day, year-round. Its efficiency is its profit margin. This is the league that Gina Rinehart hopes to play in with Roy Hill. Her start-up costs are projected to run ten billion dollars. She has sold equity stakes totalling thirty per cent to South Korean, Japanese, and Taiwanese steelmakers, and has launched a Roy Hill subsidiary that, at its peak, will employ thirty-six hundred people. She has secured approval for two new berths at Port Hedland, finished the deepwater dredging for them, and has started construction on her own two-hundred-and-fourteen-mile railway and high-tech remote operations center near Perth Airport.
I ride up from the coast with a Roy Hill employee named Adrian Mudronja. He is a tall, quiet, squared-away ex-soldier who served in Afghanistan. He checks our vehicle’s spare parts and emergency supplies before we leave, making sure that I know where the first-aid kit is and, using a two-way radio, that his dispatcher knows where we are, and that we have plenty of water. The main road south is paved, but we won’t always be on it.
The Pilbara is impressively arid, empty country. We travel for hours through broad plains of spinifex and red-earth anthills and see few other vehicles and no human settlements except, at the end of long rough dirt tracks, temporary Roy Hill rail-construction camps. By mid-afternoon, the temperature is a hundred and seven.
At a rail camp, a worker asks, “You just looking at Gina’s?”
He and Mudronja exchange glances and the question is withdrawn.
This tour is the product of weeks of my banging on Hancock Prospecting’s door. Two biographies of Rinehart were published in 2012. Neither author got a Roy Hill tour (let alone a Rinehart interview). In 2011, Hancock, before letting a group of reporters visit a company coal project in Queensland, asked them to sign a waiver that, among other things, gave it the right to review their stories before publication. The waiver went on:
There should not be reporting of other events which may inadvertently transpire on the day regardless of how newsworthy you may consider them—for example, critical incident, unplanned or unscheduled event, or any information on other matters not related to the project or related to the project should they be overheard in conversation.
Rinehart, through her representatives, agreed to let me visit Roy Hill, but Mudronja, I notice, studiously avoids mentioning her. He has been working, I learn, as a “heritage supervisor” on this rail corridor for at least a year, bashing through the bush with what he calls “T.O.s”—traditional owners, which is to say Aborigines. The rail-line route passes through an Aboriginal reserve called Abydos-Woodstock, and the entire footprint of the mine and railway must, by law, be cleared with T.O. groups. Indigenous land-use agreements, usually involving compensation, employment opportunities, and the preservation of designated heritage sites, have become the new standard in mining. Until about twenty years ago, the entire Australian continent was considered to have been, for legal purposes, terra nullius, land belonging to no one, at the moment British settlement began. In fact, people have been living in the Pilbara for at least thirty thousand years, and there are still some six thousand Aborigines there today. Their lives, broadly speaking, are harsh—though less so than when Lang Hancock was growing up there. In “The House of Hancock,” the journalist Debi Marshall notes that members of Hancock’s Aboriginal workforce recall being paid in tobacco and food. It’s hard to imagine Hancock, whose parents and grandparents were early Pilbara ranchers, collaborating respectfully and elaborately with T.O.s, but his daughter, through the likes of Mudronja, is evidently doing so, and she doesn’t mind my seeing that. At the only shop we pass all day—a gas station and grocery at the junction with a road heading northwest to Wittenoom and the Hamersley Range—Mudronja greets a middle-aged black man in a cowboy hat.
“Nah. All good, mate.”
Victor Parker is his name, and the two men shoot the breeze like old business associates.
On the dirt road into Roy Hill, bush turkeys stalk away in haughty alarm, and wedge-tailed eagles make long, slow, lumbering takeoffs. We stop beside a gigantic monitor lizard. “Bungarra,” Mudronja says. It’s the lizard’s Aboriginal name. “If we had T.O.s with us, they’d want to knock it on the head and make a fire right here and eat it.”
The most impressive thing at Roy Hill, besides the heat, is the airport. The runway, carved from raw bush, is a mile and a half long. When I visited, house-size graders were levelling it to within a six-inch tolerance, and it was almost ready to be paved. “It will take 737s and A320s,” Kevin Garden, the mine-construction manager, a Scot, said. “The terminal buildings will go over there. I imagine our chairman will be on the first plane to land. That will be a big day.” (The inaugural flight took place this month.)
The mine itself was nowhere to be seen. A temporary construction camp sat right on the ore body, where the big hole will go. The camp was a dozen long rows of mobile homes, packed tight with air-conditioned sleeping pods. (I spent a comfortable night inside one.) Offices, cafeteria—this would all soon be gone. “Fifteen million cubic metres of earth will be moved,” Garden said. Nearly eleven thousand test holes had been drilled, an unusually high number—the chairman was known for her deliberate approach, ticking every box. A “drum farm” of blue barrels filled a clearing. They held core samples taken from depths of up to seventy metres. The first twenty-five metres was overburden, dirt. “The deep stuff is best,” Greg Almond, a young geologist, told me. “Microplaty hematite. Up to sixty-five-per-cent iron. Every ton of high-grade yields six hundred kilos of steel.”
We looked at a core-sample section—a moist log of dirt and rock. “The shine is misleading,” Almond said. “That’s silica, an impurity, polished by drilling. The best stuff is ochreous, earthy.” He pointed out purple-gray material that he said was hematite. “Most of it was laid down about three billion years ago, when this iron formation was sea bottom. It was bacteria, producing oxygen as a waste product. Some of the oldest rocks you can still see on the earth’s surface are here in the Pilbara.”
Iron is among the most common minerals, but almost nowhere is it concentrated in such quantities of high-grade hematite (from “blood-like”) as the Pilbara. The trick is getting it on a ship. We drove to a hilltop, where a cell-phone tower had just been installed. This, I gathered, was where Roy Hill officials brought potential investors, usually Asian officials, to show them the future. Kevin Garden described how a rail loop would circle a nearby hill. Elevated conveyor belts would carry ore from the pit across these mulga scrublands to a massive crusher. Over there would be the permanent village, with two five-hundred-man mess halls, a lap pool, a running track, a driving range. Yes, it would all be FIFO—hence the big airport. Hell, Almond himself lived in New Zealand. One of the head chefs lived in Thailand.
Mudronja mentioned that T.O.s had identified an archeological site among the red cliffs under this hilltop.
I asked how permanent “permanent” was.
“Life of the mine?” Garden and Almond shrugged. “Twenty years of high-grade, maybe. Then reprocessing.”
Land reclamation was not their job. But mining iron ore isn’t like mining coal or gold or uranium. It does not cause comparable levels of pollution and land-poisoning. Still, it is open-pit strip-mining. It tears up the land and can acidify groundwater.
The date for Roy Hill’s first ore shipment has been sliding backward. It was late 2013, then late 2014. Now it’s September, 2015. Rinehart is at the mercy of the iron-ore price. It has shot as high as two hundred dollars a ton—many times the price of producing a ton in the Pilbara. But when it fell to eighty-nine dollars, last September, not only was Rinehart suddenly no longer the richest woman in the world but reports circulated that Roy Hill workers were being laid off and contracts were being deferred. Now it’s back at a hundred and forty-three, and construction work is going full steam. (The latest ranking of billionaires by Forbes, however, lists Rinehart as the sixth richest woman in the world.) Roy Hill, assuming it gets off the ground, will be fundamentally different from any of its main competitors. They are all owned and operated by publicly traded companies. Since only Rinehart controls Hancock Prospecting, success at Roy Hill and the company’s other projects would likely make her the world’s richest person, full stop.
Many Australians are afraid to talk about the most talked-about person in Australia. “I don’t want to lose my house,” one former associate told me. He meant that Rinehart might sue him for defamation, a relatively easy thing to do in Australia, and that defending himself against the sort of legal onslaught she is renowned for mounting would leave him destitute. I contacted many associates, ex-associates, employees, ex-employees, politicians who publicly support her projects, even neighbors. Most declined to speak—even the politicians. Most of the exceptions insisted on anonymity. I happened to meet, in Perth, a person who had worked at Hancock Prospecting. “Oh, Mrs. Hard Heart!” the person exclaimed, when I mentioned Rinehart. A nondisclosure agreement precluded further comment. Peter Foss, a former state attorney general and justice minister, was personally unafraid, he said, but he had seen Rinehart in action in the fight against her stepmother and, when it came to ex-employees, he told me, “She will sue them for sure, and she’ll bankrupt them.”
Fred Madden worked at Hancock and was the rare employee who refused to sign a nondisclosure agreement. Rinehart hired him shortly after she became chairman. He was an experienced Canadian mining executive who knew both the Pilbara and world iron markets, and she made him chief executive. He found the company chaotic. “There was no such thing as a plan, no budget,” he told me. Rinehart trusted no one. “She’d have people on the switchboard and other people watching the people on the switchboard!” Madden was optimistic even then about Hancock’s long-term prospects with iron ore, and he gives Rinehart credit for hanging on long enough to ride the China boom. He thinks, as others I spoke to do, that her constant claims about her father’s central role in the development of the Pilbara’s iron-ore industry are “overblown.” The iron ore in the Pilbara was “discovered” by a government geologist in the nineteenth century. Lang Hancock “was an individual who came along at the right time.” Madden quit Hancock Prospecting after less than a year.
Rinehart’s obsessive storytelling about her father has two sides, which are at odds. One is the hero tale. The other is that she inherited a shattered, debt-ridden company. She actually maneuvered successfully, during his last weeks, to have him transfer control of his personal estate’s main assets and royalties to Hancock Prospecting and an associated trust, which effectively bankrupted his estate. This both helped her cause in the struggle with her stepmother and allowed Rinehart to dismiss the claims of the named beneficiaries in her father’s will. The best known of this shafted group was Ken McCamey, who accompanied Hancock through decades of prospecting. Old Pilbara hands tend to credit McCamey with finding the company’s most valuable claims, and Hancock himself named one of the greatest ore bodies they found McCamey’s Monster. But McCamey remained a modestly salaried employee throughout his career. Hancock left him five hundred thousand dollars in his will, but not a penny of that was paid. Indeed, Rinehart fired the aging prospector shortly after her father died.
More lasting, the ruined-company story helps counter the “heiress” heresy. In accounts of Hancock Prospecting’s history, the company’s comatose state during the period after her arrival as chairman is routinely stressed. The Roy Hill Web site lists the precise dates on which she applied for Roy Hill exploration licenses—several months after her father’s death—alongside a note that reads, “It is therefore incorrect to refer to them as ‘inherited.’ ”
Rinehart’s thin skin about her press coverage tends to multiply her portion of ridicule. Queen Elizabeth visited Perth in 2011. Rinehart was at the garden party at Government House, wearing a wide-brimmed hat. Prince Philip asked her why she was on the guest list. She was simply a loyal subject, she replied. He asked again. “But she was incredibly modest—refused to say why she was there,” a politician’s daughter who was standing nearby told the Sydney Morning Herald. “He looked a bit annoyed, in fact, because he was looking for a straight answer. So he came out with something like, ‘Perhaps it’s because you have the largest hat in Western Australia.’ She laughed, and he laughed.” According to another guest, the Prince said to Rinehart, “That hat could poke someone’s eye out.”
Later, a reporter writing a profile of Rinehart for a magazine owned by Fairfax Media, which also owns the Herald, got, after requesting an interview, the usual rejection but with an unusual e-mail lecture attached, which the reporter suspected was written not by Hancock Prospecting’s “information manager” but by Rinehart:
Regarding the recent discussion with HRH at Government House in West Australia, other media who were present reported it was a very happy and relaxed discussion between HRH and Mrs Rinehart. . . . Your publication however chose to make the extraordinary and unbelievable claim that HRH told Mrs Rinehart that her non-pointy hat was pointy and may poke someone’s eye out! Obviously HRH would have seen many hats over the years and would not choose to stop to speak to someone for the purpose of criticising their hat, including a hat worn in honour of his wife, the Queen. This is an insult by the SMH [the Herald] to not only Mrs Rinehart, but importantly HRH.
Rinehart has been expressing herself recently in a range of media. She contributes a column to a trade magazine called Australian Resources and Investment, writes posts on the Hancock Prospecting and Roy Hill Web sites, has a speech on YouTube, and in November self-published a book, “Northern Australia and Then Some: Changes We Need to Make Our Country Rich.” Excerpts from her columns have gone viral. One much circulated riff: “If you’re jealous of those with more money, don’t just sit there and complain; do something to make more money yourselves—spend less time drinking, or smoking and socialising.” In another column, she pointed out that African miners were willing to work for two dollars a day. “Such statistics make me worry for this country’s future,” she wrote. She suggested lowering the minimum wage in Australia. Prime Minister Gillard saw fit to publicly reject Rinehart’s views. (Gillard has also described the leader of the opposition, Tony Abbott, as “Gina Rinehart’s butler.”)
Rinehart seems to lack any sense of just how dimly her fellow-Australians might look upon a multibillionaire arguing that their standard of living should be lowered in pursuit of tax and labor policies that will obviously benefit her. And yet she craves the admiration of her countrymen. When a magazine called Woman’s Day announced last year that it would add seven names to the National Trust of Australia’s list of “national living treasures” and invited its readers to vote, Rinehart’s secretary sent an e-mail around Hancock Prospecting urging the staff to vote for their boss: “Please help Mrs Rinehart get the recognition she deserves.” Employees should use their personal e-mail accounts to vote, of course. A link to Woman’s Day was provided. Rinehart did not win a spot on the list. Worse, Clive Palmer, another mining billionaire, somehow did. Palmer is the opposite of media-averse. When Rinehart’s comments about Australians being jealous wastrels came out, Palmer immediately assured the world that he enjoyed both drinking and socializing.
Rinehart is uncomfortable addressing an audience. She was scheduled to give a speech to the Sydney Mining Club in August. Instead, she sent a ten-minute-long video, in which she simply read, verbatim, one of her columns, previously published, from Australian Resources and Investment. By normal standards, it was a snore—a tendentious, obtuse, finger-wagging lecture, poorly delivered. And yet it was fascinating. Her performance was so odd. She spoke in a high, highly unnatural voice, with an accent more Queen Mother than Western Australian mine boss. She wore a huge pearl necklace. The video’s production values did her no favors. Her face was shiny and her color unhealthy, and there were cuts so clumsy that they seemed like vintage Monty Python gags. At some points, her voice suddenly shot up so high, and became so breathy, that you half-expected an ambulance crew to rush into the frame. Rinehart’s message was pro forma: Australia was doomed if it did not lower taxes, cut regulations, restrict wages, and generally make things easier for business and foreign investment. Her tone was chilly, pious; there was an air of head-shaking concern. She deplored “class warfare.” Her speech, she said, was a “call for action.”
For billionaires who cannot buy good press, there is the option of buying the press. In late 2010, Rinehart bought, for a hundred and seventy million dollars, ten per cent of a national television broadcaster, Network Ten, and received a seat on its board of directors. (The chairman is Lachlan Murdoch.) She also began buying Fairfax Media shares—first fifty million dollars’ worth, then hundreds of millions more, until she was, by mid-2012, the single largest shareholder, with nearly twenty per cent of the company. Fairfax owns Australia’s oldest, most respected broadsheets, the Herald and the Melbourne Age, as well as the Australian Financial Review, a leading national daily, and hundreds of smaller papers and magazines. It is the country’s second-largest print-media group, after Rupert Murdoch’s News Corporation. Fairfax is in poor financial shape, suffering from the industry-wide decline in print advertising. Until recently, its share price was in long-term free fall. Rinehart’s investment was plainly not a short-term profit play but part of her broader move into media ownership. At Fairfax, she wanted at least two of the nine board seats. She refused, however, to sign on to the company’s charter of editorial independence. As a result, she was offered no seats. Her dispute with the Fairfax board escalated and was amplified by the natural interest of journalists in their own fate. Fairfax cut nineteen hundred jobs and announced that its two flagship papers would switch to a tabloid format. It was all more fuel for the Gina obsession, already raging across the federation.
In addition to her media acquisitions, Rinehart financially supports a number of conservative think tanks and antitax groups. “Northern Australia” is her particular hobbyhorse—a quixotic campaign to persuade the country that the hot, sparsely populated northern third of the continent should be declared a “special economic zone,” with low or no taxes or minimum wage or regulation. As she put it in a poem of her own composition, inscribed on a plaque attached to a thirty-ton boulder of iron ore outside a shopping center on the north side of Perth:
Is our future threatened with massive debts run up by political hacks
Who dig themselves out by unleashing rampant tax . . .
The world’s poor need our resources: do not leave them to their fate
Our nation needs special economic zones and wiser government, before it is too late.
Another major Rinehart theme is climate-change denial. Members of a government climate commission warned this month that Australia needs to brace itself for a “climate on steroids.” January, 2013, was the hottest month in the country’s recorded history. The nation has been wracked by floods and bushfires. Rinehart is unconcerned. She wrote, in one of her columns, “I am yet to hear scientific evidence to satisfy me that if the very, very small amount of carbon dioxide in the atmosphere (approximately 0.83 per cent) was increased, it could lead to significant global warming. I have never met a geologist or leading scientist who believes adding more carbon dioxide to the atmosphere will have any significant effect on climate change.” She didn’t mention which leading scientists she had met, but she has helped host a series of speaking tours by Christopher Monckton, a British hereditary peer and professional climate-change denier. Monckton, in a meeting at a Rinehart-backed free-market think tank in Perth, was filmed advising the group on media strategy: “Is there an Australian version of Fox News? No. . . . Frankly, whatever you do at street level—which is what you are talking about here—is not going to have much of an impact compared with capturing an entire news media.”
The Murdoch papers in Australia already favor climate-change denial in their coverage, and Rinehart’s interest in media ownership seems to be following Monckton’s advice. A senior business reporter at the Herald told me, “I think it’s about climate coverage, in the end. There are only two shops in town, so, if she can shut down our coverage of the climate issue, it will be game over in Australia for a long time.”
Rinehart has a tumultuous personal life, which has been revealed mostly in court cases. Her long legal battle with her stepmother unearthed her grisly struggle with her father. She took to bulletproofing her car and office windows and hiring bodyguards. In 1997, one of them, an ex-policeman named Bob Thompson, filed a sexual-harassment suit against her. An article in Woman’s Day laid out his sad story. Thompson had accompanied Rinehart and her children to Hawaii, California, Europe, and New Zealand. Rinehart, he said, wanted to marry him, even though he was engaged to someone else: “I told her over and over I wasn’t interested, but she wouldn’t take no for an answer.” She insisted, he said, that he get an H.I.V. test and that he tell her about his sex life, past and present. He described Rinehart as “incredibly lonely.” Then he dropped the suit and disappeared, reportedly after an out-of-court settlement.
Getting people to sign on the dotted line, swearing them to silence, is one of Rinehart’s driving passions. Her employees must sign agreements never to talk to the press about her or Hancock Prospecting. Her children have been obliged to sign any number of secret agreements—in a 2006 deed that recently surfaced in court, they agreed to say nothing that might “disparage” Rinehart or “lower her reputation in the estimation of the public.”
Family disputes have clouded the question of who will eventually succeed Rinehart. Her oldest child and only son, John Hancock, has a difficult relationship with his mother. (He changed his name as a young man, preferring to honor his grandfather rather than his stepfather, Frank Rinehart.) He joined the board of Hancock Prospecting at twenty-one and was seen as the heir apparent. He grew uncomfortable, however, with some of the things he was asked to do. His mother’s fierce disputes with her lawyers, for instance, led her to dump legal work on him for which he was unqualified. He was also asked to deal with Hilda Kickett, an Aboriginal woman who had come forward, in 1992, to say that she was Lang Hancock’s illegitimate daughter. There were long-standing rumors of children fathered by Lang Hancock with Aboriginal women who worked for his parents in the Pilbara. Kickett’s mother was a young cook for the Hancocks. Hilda Kickett is a member of what is now known as the “stolen generation”—Aboriginal children who were seized from their parents by the state with little or no explanation and raised in orphanages under an openly racist policy that was in place until 1969. Kickett claimed she did not want money, only family acknowledgment. She did not get it from Rinehart. Rinehart’s private investigator heard that Rinehart’s stepmother—this was during their epic court battle—might have contacted Kickett. Rinehart dispatched John to meet with Kickett and her husband. They got along, and a week later Rinehart sent her son back to Kickett with a statement to sign, attesting that she wasn’t Lang Hancock’s daughter, after all, but Lang Hancock’s father’s daughter. Kickett refused to sign.
Over time, John’s relationship with his mother deteriorated. They quarrelled. “I had opinions,” he told me. “But providing another view is not required in a yes-man company culture.” She accused him of “disloyalty,” and he left Hancock Prospecting.
Each of Rinehart’s children has seemed, at different stages, to be in the line of succession. Bianca, the second-eldest, took John’s seat on the Hancock board. She enrolled in a business course, studied Mandarin in Beijing, and spent a year as a FIFO worker for Rio Tinto in the Pilbara. But she, too, left the family business. The next child, Hope, married an American, Ryan Welker, who was brought into Hancock Prospecting, where he flourished until he didn’t. He and Hope moved with their children to New York City. The favored child at the moment is the youngest, Ginia, who is twenty-six. Until recently, she lived in London, where she worked as a party planner at Fabergé. Ginia has been appointed to various Hancock Prospecting boards, and is now reportedly embarking on the same FIFO traineeship with Rio Tinto that her sister did.
John Singleton, a Sydney businessman who is friendly with Rinehart, told the Herald that her estrangements from her children flow naturally from her priorities. “It’s because the business comes first,” he said. “Being a parent is secondary. It’s just ‘Where do they fit into the dynasty? Are they iron or are they coal or are they uranium?’ If they don’t fit into the company, there’s no role for them.”
The details of the latest estrangement exploded into the courts in 2011, after the three older children filed suit to have Rinehart removed as trustee of the Hope Margaret Hancock Trust, which Lang Hancock had created for his grandchildren. The trust owns nearly twenty-four per cent of Hancock Prospecting—a holding worth billions today. Lang stipulated that Rinehart would control it only until it vested, on the twenty-fifth birthday of her youngest child, Ginia. But Rinehart had decided to extend that vesting date, ostensibly to avoid tax consequences, to 2068—when John will be ninety-two and the others not much younger. The children learned about this alteration of their prospects only when she asked that they approve of it, shortly before Ginia’s twenty-fifth birthday. She said that they faced bankruptcy if they didn’t sign documents agreeing to her terms. When they objected, Rinehart argued that they were “manifestly unsuitable” to control their own trust. She suggested that they “reconsider their holidaying lifestyle and attitudes.” Only Ginia sided with her mother. The three others accused Rinehart of “deceptive, manipulative and disgraceful conduct” and sued to gain access to their inheritance.
Rinehart has fought to keep news of this intrafamily legal battle suppressed. It could hurt Roy Hill’s chances of attracting investors, she said, during an unsuccessful argument to keep the case secret. But the financing of Roy Hill is proceeding—with her equity partners in place, Rinehart is now seeking debt funding from a wide range of interested banks and export-import credit agencies. Rinehart also argued that the legal wrangling could expose the family, including her grandchildren, to publicity that might increase the risk of kidnapping or worse. She commissioned a set of reports on security risks faced by the very rich, which she submitted to the court. The reports, besides surveying the travails of David Beckham, David Letterman, and others, included unredacted correspondence from Rinehart’s children, which had the unfortunate effect of making their home addresses, e-mails, and other personal details a matter of public record.
John Hancock was so incensed by his mother’s behavior that, defying nondisclosure agreements, he vented to a reporter, Steve Pennells, at Perth’s West Australian, about the increased jeopardy she was creating for his wife and children. Among other things, Rinehart had threatened to cancel the ransom insurance that had been provided for her children and grandchildren. Hancock told Pennells, “What more can I do than communicate to any kidnappers out there—over my dead body and you will be wasting your time anyway. If you think you’re going to get anything from my mother, good luck.” Rinehart eventually went after Pennells, persuading the court to issue a subpoena for all his notes and recordings related to her case against her children. Pennells, with the support of his paper, is fighting the subpoena. Rinehart seems most interested in what he may know about how her children are paying their legal bills, which are reportedly running a hundred thousand dollars a month. Pennells did a story about meeting, through John, a nameless supporter in Hong Kong. Rinehart assures Fairfax Media, meanwhile, that she has nothing but respect for the practice of journalism.
It soon became clear, as her children tried to gain control of their trust, that Rinehart would break Hope first. Hope’s e-mails to her mother, as disclosed in court, were full of painful desperation and financial panic even before the money from Mem, as she calls her, was cut off. Hope wants to stay in New York, to have a cook and a bodyguard and a housekeeper and send her children to private schools. But Rinehart wants them back in Australia, away from the family of Hope’s American husband, whom she does not trust. She will apparently accept, as an alternative, Singapore, a free-market tax haven of which she approves. Early this month, it was reported that Hope and her mother had reached an agreement. Hope would withdraw from the suit. “Two down, two to go,” an anonymous family insider told Adele Ferguson, Rinehart’s biographer and a business writer for Fairfax Media. After Ferguson’s story appeared, Rinehart hit her immediately with a subpoena, demanding to have the notes and recordings of her interviews with John Hancock going back to 2011.
Two television miniseries about Rinehart are now in preproduction in Australia. One will be based on Ferguson’s biography. The other has retained Steve Pennells as a consultant. Its working title is “Mother Monster Magnate.”
The main thrust of Rinehart’s political tirades is that Australia is becoming “uncompetitive,” that the cost of doing business there is too high. The government is running up debt to support a popular but unsustainable welfare state. The country will soon go the way of Europe—or, to be more specific, Greece (sometimes Portugal). Her prognostications, and those of her political allies, are often apocalyptic. (Lang Hancock’s were, too.) And it is true that Australian wages are relatively high. The idea—a threat, really, much repeated—that the mining multinationals will soon pick up and leave for Africa in search of cheaper labor ignores basic factors such as efficiency, infrastructure, and sovereign risk. In January, Rio Tinto was forced to write off a three-billion-dollar investment in coal in Mozambique, largely because of infrastructure problems. Rio Tinto’s C.E.O. was obliged to resign. Such debacles are extremely unlikely to happen in Australia. The fact that the country’s minimum wage is more than sixteen dollars an hour—more than twice the federal minimum wage in the United States—does not suggest global uncompetitiveness so much as broad prosperity. The Economist, never a known fan of the minimum wage, recently ran a feature, “Where to Be Born in 2013,” for which its researchers put together comprehensive quality-of-life forecasts for eighty countries. Australia was ranked No. 2, after Switzerland. (The U.S. was tied for sixteenth.) While the rest of the world has suffered through the Great Recession, Australia has enjoyed twenty-one straight years of economic growth. Perhaps Rinehart is wrong about her country being on the road to socialist perdition.
Many people think the mining boom was responsible for Australia’s comparatively painless path through the global financial crisis. High world prices for the commodities that Australia produces in abundance—iron ore, coal, liquefied natural gas—have definitely helped. But mining still accounts for less than ten per cent of national economic output, and mining employment is surprisingly small—less than two per cent of the workforce. Moreover, mining profits tend to go overseas. In 2010, according to a study by the Australia Institute, eighty-three per cent of domestic mining production was owned by foreign companies.
And so Gina Rinehart, for all her personal wealth, is not a particularly big fish in the pond of Australian mining. She shares, however, in the extraordinary profit margins that mining companies in Australia enjoy—forty-two per cent in 2011, when business profit margins as a whole were thirteen per cent. These were the “super profits” that Kevin Rudd’s Labor government tried, without success, to capture a part of. The Reserve Bank of Australia’s decision to cut interest rates and a large and timely stimulus program helped the country through the Great Recession at least as much as mining did. Meanwhile, the strong demand for Australian minerals has driven up the value of the Australian dollar, hurting agriculture, manufacturing, and other “trade-exposed” sectors.
Many people worry that Australia is becoming “Asia’s quarry.” A creeping case of the resource curse, also known as the paradox of plenty, may even be ahead. The resource curse damages the economies of countries blessed with great exportable natural wealth, increasing volatility by an overreliance on global commodity prices, starving other sectors, distorting exchange rates, and driving painful cycles of boom and bust.
In his book “The Lucky Country” (1964), the Australian social critic Donald Horne decried the mediocrity of Australian political and business culture. The book’s most famous line was “Australia is a lucky country, run mainly by second-rate people who share its luck.” The phrase lost its meaning over time, however, as it was widely adopted as a kind of sunny national motto. In a recent book called “Too Much Luck: The Mining Boom and Australia’s Future,” the journalist and academic Paul Cleary argues that the resources boom is being classically mismanaged, indicting both federal and state governments for failing to regulate and tax properly the multinational corporations flocking to Australia to extract nonrenewable resources such as iron ore. As a counterexample, he offers Norway’s management of its offshore-oil boom. Norway, with a population of five million, has taxed the major oil companies heavily and created the largest sovereign wealth fund in the world, now worth more than seven hundred billion dollars, insuring the prosperity of future generations. Australia is doing nothing comparable with a boom that Cleary describes as a “once-in-a-century opportunity.” The most striking thing about Cleary’s fierce, concise book, perhaps, is his day job, as a senior writer for Rupert Murdoch’s national daily, the Australian.
Australian progressives, including Wayne Swan, the Deputy Prime Minister, believe that the country is changing for the worse. They fret about Americanization. Swan, a Bruce Springsteen fan, recently implored a Melbourne crowd, “Don’t let Australia become a Down Under version of New Jersey, where the people and the communities whose skills are no longer in demand get thrown on the scrap heap of life.” Swan has written, “Politicians have a choice: between . . . standing up for workers and kneeling down at the feet of the Gina Rineharts and the Clive Palmers.” As I encountered the depth of the fear of Rinehart, particularly in Perth, I did wonder if the cheeky insouciance of the casino pot washers of my youth and their employer’s gracious response to abuse were not bygone Aussie virtues.
But Rinehart challenges Australia’s idea of itself (and thus makes herself a national obsession) not only with respect to democratic values. She’s also an aesthetic affront. Down Under, a high quotient of wryness, of jokes at one’s own expense, has long been mandatory, both in private and in public. People who lack that capacity are either pitied for their witlessness or, if they’re too pious or aggressive, resented. Rinehart’s hectoring, tin-eared public persona makes her seem as though she were born without the wryness gene. She’s admired in some quarters for her determination, but the iconic Aussie Battler was never a bully, let alone a billionaire. I have often heard Rinehart grumpily described as “un-Australian.” Her raw, seemingly humorless veneration of money would be bad form almost anywhere. In Australia, it’s both offensive and unsettling.
Many critics have pointed out the conflation, in Rinehart’s political arguments, of what she insists is the national interest with her own commercial interests. Beneath that patent cynicism, though, and beneath her paranoia, her cunning, her crude self-promotion, her manipulations, both clumsy and deft, is a weird sincerity. She believes the mining gospel she preaches. She believes that she and her fellow-billionaires know best. She truly wants to own and operate an iron-ore mine, wants it more than anything. She would also like to be celebrated and thanked and hugely rewarded. And she wouldn’t mind pushing around governments the way that Rupert Murdoch does. But she lacks the belief that she can charm people, can persuade them, can do more than bully them. That, perhaps, is why she will not consent to an interview. She’s afraid of sounding foolish.
As I travelled around Australia, strangers in pubs, on airplanes, in beach parking lots would bring up Gina Rinehart, not knowing I was writing about her. Everybody had something to say, some of it thoughtful, some of it poorly informed, some of it vividly obscene. One day, in Sydney, I picked up a couple of newspapers and found five articles that mentioned her. The country is simply wall-to-wall Gina. But finally, near the end of my trip, I met someone who had not heard of her. She was a student at the same exclusive girls’ school in Perth where young Gina Hancock spent many years. We were at a Sunday lunch in Fremantle, across the Swan River from Perth. The girl was with her family. I tried not to show my surprise. With furrowed brow, she racked her brain. No, the name meant nothing to her. ♦