Billionaire Gina Rinehart creates mega miner with merger of her Atlas Iron and Roy Hill

As Gina Rinehart announced the 3000-strong workforce of Roy Hill and the contractor-driven Atlas Iron would become a single entity, she couldn’t resist handing some advice to the government.

Roy Hill and Atlas Iron will join forces under the name Hancock Iron Ore in what represents the biggest shake-up for Gina Rinehart’s Hancock Prospecting mining operation in years, amalgamating her two iron ore businesses to make them leaner.

The billionaire Mrs Rinehart, Hancock Prospecting’s executive chair, announced the changes on Tuesday night at the Roy Hill mine in the Pilbara.

The Roy Hill and Atlas mines are the Hancock group’s most significant and profitable operating assets and the sources of great wealth for Australia’s richest person, who used the occasion to repeat warnings about policy detrimental to mining investment.

Roy Hill reported a net profit of $3.23bn for 2023-24, and delivered a whopping $4bn dividend on the back of record shipments. Atlas made a $440m profit last year after an increase in shipments from Port Hedland.

Gina Rinehart with Roy Hill chief executive Gerhard Veldsman and Hancock Agriculture chief executive Adam Giles in the US.

Roy Hill employs about 3000 workers whereas Atlas Iron relies heavily on contractors. Both operations have been run by trusted Rinehart lieutenant Gerhard Veldsman since early in 2023.

Mrs Rinehart acknowledged and thanked long-term partners in Roy Hill – South Korea’s POSCO, Japan’s Marubeni and China Steel – in unveiling the amalgamation.

“Finding partners to invest alongside Hancock Prospecting in our mega project Roy (Hill) 15 years ago was critical, and we would not be in the position we are in today, providing billions in tax revenue, and more billions to support local companies, without POSCO, Marubeni and China Steel partnering and investing substantially with us,” she said.

“Regrettably, more recently investment into Australia is declining. This will badly affect tax revenue, record national debt, opportunities and living standards. As I often say, when mining does well, so do Australians, but I need to add, when mining doesn’t do well, nor do Australians.

“We hence need to be very encouraging of policies that are more welcoming to investment. Other countries are certainly doing this.”

Mrs Rinehart thanked “loyal partners and staff whose hard work and commitment have helped to build Roy and Atlas to enable us to evolve into Hancock Iron Ore, the best mining company in Australia”.

Mr Veldsman, the Hancock Iron Ore chief executive, said the world of iron ore was evolving and so were the Hancock entities to bring together their experience and combined strengths.

Iron ore heavyweights BHP and Rio Tinto have indicated they think Chinese demand for the steelmaking ingredient has peaked but will remain strong. Iron ore is trading at about $US95.60 a tonne, down about 4 per cent in the past month and almost 11 per cent lower than this time last year.

Gina Rinehart hosts Games athletes on the Seine River in Paris. Picture: Adam Head

Roy Hill is one of Australia’s leading iron ore miners and ships around 64 million tonnes of iron ore each year to steel making markets in Asia. Mrs Rinehart fought a long battle to bring the mine to life over a decade ago.

Roy Hill made enough cash to pay down a $10bn debt after just five years, and declared a maiden dividend of $475m in 2020. It is estimated the mine has about eight years of life remaining.

Hancock Prospecting acquired Atlas for $427m in 2018 after a three-way bidding war that involved Andrew Forrest’s Fortescue and Chris Ellison-led Mineral Resources. Atlas currently exports about 10 million tonnes of iron ore a year. Hancock said the name change, which takes place from July 1, would not affect customer, vendor or partner contractual obligations for Roy Hill and Atlas.

The West Perth-headquartered private company said Roy Hill and Atlas had delivered more than $11.5bn in royalties and taxes to governments and injected billions more into Western Australia, supporting many small, medium and larger businesses through contracts for goods and services.

The next new mine on the horizon for Hancock is the $600m McPhee project about 100km north of Roy Hill. McPhee is being developed by Hancock subsidiary HanRoy led by the group’s chief executive of projects, Sanjiv Manchanda.

It is expected to start production of about 10 million tonnes a year in 2025-26.

Originally published as Billionaire Gina Rinehart creates mega miner with merger of her Atlas Iron and Roy Hill