Billionaire Wright family heirs share $230m iron ore dividend bonanza
The secretive Perth trio behind Wright Prospecting got a huge payday as the price of iron ore surged during 2020.
Hundreds of millions of dollars of profits and dividends from higher iron ore prices and uninterrupted exports to China despite COVID-19 are flowing to some of Australia’s richest families.
Two of Perth’s wealthiest and most secretive families shared in a whopping $230m of dividends this year, according to financial accounts lodged with the corporate regulator late on Friday.
The 2020 annual report for Wright Prospecting, owned by the descendant of Pilbara pioneer Peter Wright — the one-time business partner of billionaire Gina Rinehart’s late father Lang Hancock — shows the huge amounts the iron ore heirs are making during boom times for the commodity.
The result sets the scene for Rinehart’s Hancock Prospecting to lodge a bumper profit result and dividend payout — and reveal the huge and potentially record amount it pays in tax — with the Australian Securities & Investments Commission later this year.
It also sheds light on the money being spent — with hundreds of millions of dollars, or even billions, at stake in a series of legal battles currently before courts or set to start in the next few years.
Wright Prospecting is jointly owned by a trio of Perth billionaires and their families who feature prominently on The List — Australia’s Richest 250. Angela Bennett is on one side of the Wright family and sisters Leonie Baldock and Alexandra Burt, daughters of Ms Bennett’s late brother Michael Wright, are on the other, via their private VOC Group.
The accounts reveal Wright Prospecting made a net profit of $204.9m for the year to June 30, up from $160.6m the previous year. The company received $301m in revenue, compared with $236m in 2019, with $296m of its income from mining royalties or its share of the Hancock & Wright partnership income.
Wright Prospecting paid its owners $199m in dividends during the 2020 financial year and a further $31m after June 30. It paid company tax of $88m.
“The company recorded increased revenues from royalties and its interest in the Hancock & Wright partnership largely due to high average commodity prices despite decreased shipment volumes,” according to the directors report.
The money to Wright Prospecting flows from deals Bennett’s late father Peter Wright and his business partner Lang Hancock made after pegging tenements in the Pilbara region of Western Australia in the 1960s.
Wright Prospecting has been receiving royalties and partnership income from huge iron ore assets being developed by mining giant Rio Tinto in the Pilbara. So lucrative is the arrangement that the Wright heirs have shared more than $1bn in dividends in the past decade.
But Wright Prospecting has also been shelling out more money in legal fees, its accounts show. It had $3.9m in legal expenses in 2020, up from almost $3.2m in the previous 12 months.
The company is involved in a series of court battles, including one involving Ms Bennett’s brother Julian Wright. He is suing his sister Angela Bennett and the estate of his deceased brother Michael Wright, claiming they “deliberately and actively” deceived him into accepting a cut-price offer for his stake in the business. Julian Wright sold his stake in Wright Prospecting in 1987 for $6.8m.
Meanwhile, Mrs Rinehart and her Hancock Prospecting is defending claims by Wright Prospecting to its Hope Downs iron ore tenement, co-owned by Hancock and Rio Tinto, in the Pilbara.
Wright Prospecting had earlier sued Hancock Prospecting successfully over gaining a greater share over the high-grade Rhodes Ridge deposit, following 17 years of legal battles.
The owners of Wright Prospecting appear to have different strategies regarding investing the proceeds of their annual dividends. Ms Bennett’s fortune is invested in AMB Capital Partners, which has assets in property, financial services, energy and resources.
Baldock and Burt’s share of Wright Prospecting is held via the British Virgin Islands incorporated VOC, which is domiciled in Australia with a business address in Perth. Burt owns the Voyager Estate winery in Western Australia’s Margaret River.
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