Miner royalty

FAMILY loyalty, soaring ambition, devout faith. What's behind Andrew "Twiggy" Forrest's rise to huge wealth and his pledge to give most of it away?

Andrew Forrest as CEO of Anaconda Nickel in 2000, when it was in deep financial trouble. Picture: Tom Rovis-Hermann

WHEN Judy Forrest discovered she was pregnant in 1961, her first reaction was to plan for a miscarriage. Life on an outback station in Western Australia was demanding enough with two small kids and a husband gone from dawn to dusk. For Judy, the thought of having a third child was horrifying.

So she decided to ride her horse bareback across the rugged Pilbara terrain every day for a week with the aim of aborting the pregnancy. When that didn't work, she jumped off the roof overlooking the homestead's tennis court three times a day for seven days, without success. Friends advised her to hit the gin bottle as well, but she drew the line at that.

On November 18 of that year Judy gave birth to a healthy boy, John Andrew Henry Forrest. She confided in her youngest son from an early age that she had wanted to end the pregnancy, and told him he must be a tenacious type to have survived in the womb. It may have been a calculated ploy by the tough-as-nails Judy to instil in him a sense of self-belief and drive that she believed would take him far in life. According to the small group of friends who have heard this story from her son over the years, it also implanted in his brain the overwhelming need to impress his mother. "So much of what he does is proving to his mother that he's worth it," says Warwick Grigor, Forrest's former business partner. "It really is a big motivating factor."

Young John carried another weighty burden from his birth: his name. Being named after his great-great uncle, Sir John Forrest - a renowned explorer who became Western Australia's first premier - was too much to bear, so he decided to use his second name, Andrew. Despite this, many believe his famous forebear has inspired him, as an entrepreneur, to take extraordinary risks and pursue grand dreams. Grigor, who knows Forrest better than most, suggests his success is driven by a combination of living up to the Forrest family legacy while subconsciously trying to prove to his mother that he deserved to be born in the first place.

The great Australian mining boom of the early 21st century is replete with tales of towering ambition and colossal wealth, but the story of Forrest's unlikely journey is perhaps its most enthralling. It is a study of bravado, guile, folly, adversity, triumph and vindication.

At school, Forrest was a rebellious, stick-thin kid who was quick with his fists. Later, his business ethos was shaped in the get-rich-quick culture of Perth's stockbroking scene of the 1980s, when crooks such as Alan Bond and Laurie Connell were on the make. By 2001 Forrest's company, Anaconda Nickel, was in dire straits and his reputation was shot to pieces. Seven years later, thanks to the success of his iron ore venture, Fortescue Metals Group, he had mined the fastest sharemarket fortune in Australian history and was worth $10 billion. Now he is remaking his image yet again. Forrest publicly pledged this year to give away most of his fortune - recently estimated by Forbes magazine at $5.7 billion - to charity. It's a promise that could make him Australia's greatest philanthropist.

He revealed the biggest inspiration for his giving: the Bible. Forrest's devout Christianity is unusual for a prominent Australian entrepreneur, perhaps especially so for one who thrives on risk and adopts a win-at-all-costs approach to business. But none of Forrest's friends doubts his piety. They have experienced enough Forrest- led prayer sessions, or caught him sneaking a quick read of his Bible during enough hectic overseas business trips, to understand that belief in God appears to guide his every waking hour.

Forrest "found" God as a nine-year-old boy in the sandhills near Minderoo, the family property. He grew up in a family of Anglicans, but the Forrests were not overtly religious. Late one afternoon, Andrew was riding his motorbike miles from the homestead when he decided to throw the key to the machine away in the dunes to see if he could find it again. He related the anecdote last year: "One of the reasons I became a Christian and am still a Christian now is because after about three or four hours of fruitless search among the spinifex and the hot sand for this key which I was probably never going to find, I tried everything, every physical thing to find the key. And eventually, when I had given up all hope ... I prayed. And when I came up from praying, there was the key between a little petrol overflow hose and the carburettor on the motorbike.

"Now there's not a snowflake's chance in hell that I threw it there; I threw it over my shoulder. So I just thought, 'OK, that's cool, we're showing off a little here, God. That's a very obvious sign, I won't ever test you again' - and I haven't." To non-believers the story might sound faintly absurd, but for the young Andrew Forrest it was a seminal event.

As an adult, Forrest has never hidden his religious beliefs. When he opened the Murrin Murrin nickel plant in 1999 alongside prime minister John Howard, he asked the 300 guests to bow their heads as he recited a lengthy prayer. And in 2012, after beating civil charges laid by the Australian Securities and Investments Commission - the corporate watchdog had accused him of misleading investors - he told a gathering of friends and colleagues that he had triumphed because God was on his side. Forrest says all the guidance he has ever needed as an entrepreneur is derived from the Bible.

His piety seems to have flourished after he met his wife Nicola, who hailed from a devout Christian family and had a moral compass that Forrest needed badly at the time. The Forrests' faith in God was fortified by the stillbirth of their baby girl, Matilda, in the late 1990s. She would have been the couple's third child. The impact of Matilda's death on Forrest was profound. He took counselling from Reverend Ken Drayton at St Philips in Cottesloe and began attending church more frequently.

These days, Forrest's local priest at St Philips is Malcolm Potts. In one of his recent homilies, Potts discussed his belief that once someone is earning more than $70,000 a year, more money won't make them any happier. Forrest wasn't in church that particular morning but if he had been, it's unlikely he'd have been squirming in his pew. Because these days, Forrest's opinions on money - or at least those he has espoused publicly - are very similar to his priest's. Forrest says his greatest pleasure as a billionaire is derived from giving money away to those less fortunate than him. Forrest's views on wealth were entrenched by 2007, when his fortune on paper had already hit $4 billion. He told Perth journalist Mark Drummond that his children knew they would never have to worry about the "burden" of a huge inheritance. "We are not about creating a Forrest dynasty, we're about helping others," he said.

A few weeks later, Forrest embarked on the first stage of giving away chunks of his fortune: one million of his shares in Fortescue Metals Group and 115 million options in a nickel mining company he chaired, Poseidon Nickel, to the Australian Children's Trust (ACT), the charity for indigenous and other underprivileged children that he and Nicola had set up several years earlier. The combined value of the Fortescue shares and Poseidon options at the time was about $85 million, making it the single biggest act of corporate philanthropy in Australian history. Forrest said he wanted to follow in the footsteps of American philanthropists such as Warren Buffett and Bill Gates and he hoped his generosity would inspire others in Australia.

Forrest also gave another 520,000 of his Fortescue shares - worth more than $20 million at the time but soon to be worth more than twice that - to his brother, David, and sister, Janie. In total, he had given away more than $100 million in one day. The $85 million in shares Forrest donated to ACT was a generous gift, but it didn't end up being anywhere near as generous as he'd intended; the global financial crisis soon shrank the value of the donations. And, as the media would later document, Forrest had saved himself a huge tax bill by electing to have the 115 million Poseidon options issued to his charity rather than to himself. Forrest's combined tax savings from the share gift and options issue came to $25.7 million.

In 2007, Forrest decided to spearhead a movement that he boldly predicted would eliminate indigenous disadvantage in Australia in 20 years. He contacted three leading indigenous figures who had long opposed passive welfare in Aboriginal communities - Noel Pearson, Marcia Langton and Warren Mundine - and went to work on convincing the newly elected Rudd government to back him. Observers say Forrest and Rudd began talking with the modest, perhaps sensible, aim of initially creating 5000 jobs for Aborigines, but they quickly started bidding each other up. By the end of the chat they had decided 50,000 jobs in two years would grab people's imagination and announced the pact, known as the Australian Employment Covenant (AEC), at a press conference the next day. Pearson was thrilled with the initiative but startled by the ambitious target. "It was a complete hit to the solar plexus when Andrew proposed not a few thousand real jobs in a timeframe, but 50,000 guaranteed real jobs," he said.

It took only a few months for Forrest to start backtracking on his promise. He had adopted his tried-and-true business tactic of achieving the impossible by setting unrealistic targets, but this time it hadn't worked. Still, he'd managed to bring a critical issue to the attention of corporate Australia. In a study into the scheme in 2010, researchers at the Australian National University found that although his claims about the AEC's progress had been "overstated", the 20,000 job pledges it had received were still a "significant" achievement, and a notable shift in the landscape of indigenous employment. Despite the missed targets, Forrest has not given up. As of this year, the AEC has had more than 60,000 job pledges from 300 employers, and has helped place more than 14,000 indigenous people in work.

After 2008, Forrest began to broaden his philanthropic efforts to include disaster relief. Within days of the 2009 Black Saturday bushfires, which killed 173 people and destroyed thousands of homes, he swung into action. The ACT charity spent $100,000 of Forrest's money erecting a temporary community centre in the main street of Marysville; in the weeks that followed, Forrest visited the devastated town several times and organised a charity golf day with Greg Norman that raised close to $1 million and ended with a concert by Simon and Garfunkel. Marysville residents later reported how impressed they were that Forrest devoted such a large amount of his time to the cause. "Forrest is one of the people who have hung in there," community leader Doug Walter said a few years later. "I could give you a catalogue of people who turned up to get their photo in the paper, made extravagant promises and then disappeared, but he's certainly not one of them."

Forrest's most symbolic act was donating 1000 "dongas" - small, transportable huts used in his Pilbara mines - for Marysville residents who'd lost their homes. The Victorian premier at the time, John Brumby, recalls that Forrest had asked the government what was needed and was told that emergency accommodation was a priority. "I couldn't fault him," Brumby says. "He wasn't a Victorian and he wasn't looking for anything from our government."

It was a shock, then, to those working on the rebuilding mission when Forrest sent a bill for $300,000 to the Victorian government to cover the cost of returning the dongas to the Pilbara. The government had agreed to pay for the transport costs as part of the original contract, which was signed hastily after the disaster, but many working on the reconstruction were unaware of this and had assumed Forrest would pick up the tab. A Marysville leader, who worked closely with Forrest, says: "Twiggy's a very complicated individual. He's not just all show - he is motivated by good values. But he doesn't have the self-awareness to understand the impact of his actions."

Forrest's philanthropy has gone into overdrive in the past couple of years. Barely a month goes by without a new announcement: millions of dollars to the Salvation Army and St Vincent de Paul; donations to Mission Australia, YouthCare, a multi-denominational group that provides chaplains in schools, and Fairbridge, a charity working with young offenders. In 2011 Forrest gave $3 million in Fortescue shares to the Art Gallery of Western Australia, and another $3.7 million worth of stock to be divided among several of the state's performing arts companies. He also gave $1.3 million in Fortescue shares to Murdoch University's Institute for Immunology and Infectious Diseases - the biggest personal contribution in the university's history.

Forrest's next philanthropic mission was much bigger in scope and ambition than anything he had attempted previously. In 2012, he announced that he wanted to end the curse of global slavery and was forming an organisation, Walk Free, to tackle the problem. This was the issue that would put him on the world map for philanthropy. Mundine, then CEO of GenerationOne, Forrest's campaign to end Aboriginal disadvantage, recalls his shock at the venture: "I laughed and said, 'Mate, you're not just satisfied with fixing the Aboriginal issue - now you want to save the world.' But I love that about him." Forrest had put $8 million of his own money into establishing Walk Free in 2012 and is on track to tip in a further $12 million by the end of this year.

The rise of Forrest as the nation's greatest philanthropist culminated this year, when he and his wife became the first Australians to sign the Giving Pledge, the movement established by Bill Gates and Warren Buffett in the US. By signing the pledge, the Forrests promised to give away "the vast majority" of their fortune. Forrest has so far given away almost $300 million. This month, he announced a gift of $65 million to fund research at WA's five universities, including his alma mater, the University of Western Australia.

What is driving Forrest's quest to become a philanthropist on a global scale? There are several theories. His religious faith is evidently central to his belief in trying to help those less fortunate than himself. But in recent years his generosity has been spurred by attacks on his so-called greed, led by Wayne Swan in the wake of the mining tax brawl. "Charity is not a substitute for paying tax," the then treasurer said. Another theory is that Forrest desperately wants to rub shoulders with global business and government leaders such as Gates, and philanthropy is a useful means of winning respect among the world's elite.

Perhaps there is also some "billionaire guilt" at play. Grigor, once cynical about Forrest's motives, has come to admire his growing social conscience. "I genuinely believe he wants to do good. In essence, he's got a good heart," Grigor says. But Grigor also sees a conscience that needs assuaging: "He does have to contend with a sense of guilt; you can't be a good Christian, do all that he's done and not want to recompense for that. It's only logical."

Investment banker John Poynton, who is at the forefront of encouraging Perth's wealthy to become involved in philanthropy, prefers to take a sanguine view of Forrest's motives. "I think he is going to be one of the world's greatest philanthropists," he says.

Andrew Forrest tries hard to project an image of being an ordinary, knockabout Aussie bloke whose wealth hasn't changed him. That may have been true once, but it's a much more difficult argument to mount these days. After making his first $2 billion in 2007, Forrest said: "I still walk around barefoot with my kids on the weekend, I drive a car old enough to vote [a 1986 Mercedes], I don't gloat." A year later, when his fortune was approaching $10 billion, he continued to insist that money wasn't overly important. "Once you can look after your own needs, it becomes superfluous," he said.

But Forrest has gone to great lengths to look after those needs. In fact, he has spent tens of millions of dollars acquiring some of the trappings of wealth favoured by billionaires the world over. There are few outward shows of it, though. On a normal evening, his wife Nicola will be cooking dinner while their three kids and their friends will be hanging around the kitchen or watching TV - unless they're taking a dip in the pool or playing on the tennis court.

Forrest now has the Cottesloe beachside family home, a Sydney penthouse apartment, the Gracetown coastal holiday house close to the vineyards of Margaret River, the Byford rural retreat in Perth's foothills, the investment properties in Cottesloe, the luxury boat and the Fortescue corporate jet. All this for a man who claimed to eschew the accoutrements of wealth.

His good friend Rodney Adler says Forrest was once driven by the desire to be super-rich, but has now moved beyond that. "After you go past a certain point - and for Andrew I don't know which billion it was - the motivation is no longer wealth. Because you have so much, you can't spend it in your lifetime."

The real jewel in Forrest's empire is Minderoo, the 280,000ha cattle station in the Pilbara that served as the family seat for four generations until his father Don was forced to sell in 1998. Forrest was shattered by the sale and vowed to buy it back one day if he ever had the money. Eleven years later, the family name was back on the mailbox. He has since spent millions of dollars refurbishing the place.

Forrest's intense familial attachment to Minderoo may explain his bizarre attempts to keep other mining companies off the land. Like other pastoral stations in WA, Minderoo is rich with minerals buried beneath it. But pastoral leases are all on Crown land, leaving pastoralists with little room to object to mining and exploration permits. In this region of wide open spaces, pastoralists and miners usually coexist quite happily. As a miner, Forrest has taken full advantage of his rights: Fortescue's Cloudbreak and Christmas Creek mines in the Pilbara were built across three active pastoral leases, including Gina Rinehart's Mulga Downs station.

But in 2010, the shoe was on the other foot for Forrest when a small private company called Yarri Mining lodged an application to conduct sand mining at Minderoo. The Minderoo lease is more than twice the size of New York City. Yarri applied for two mining leases covering only 141ha - or about 0.05 per cent of the total area. In response, Forrest's private company, Forrest & Forrest, lodged multiple objections to the grant of the mining leases, arguing that the noise from any mining operation would frighten the cattle and threaten the survival of a rare marsupial called the mulgara.

In a judgment handed down in January, magistrate Stephen Wilson said it was difficult to fathom how two mining leases covering such a small area could cause any financial or environmental impact to Minderoo. But Wilson saved his real disdain for Forrest & Forrest's "dictatorial" application to impose a condition that Yarri must pay Forrest an annual performance guarantee of at least $200,000 if mining went ahead. "In my opinion this proposed condition by Forrest is outrageous," he said.

When he created Fortescue, Forrest promised repeatedly that his railways would be open to other Pilbara miners and that this would help unlock the huge potential of the region for anyone with a stranded deposit. This open-access regime was also a critical part of the mining agreement he signed with the WA government in 2004. Forrest's mantra was that BHP Billiton and Rio Tinto had failed the nation by refusing access to their infrastructure, but he would be its saviour. Years later, however, Fortescue's rail lines remained as closed to other companies as those of BHP and Rio. By 2013, it was painfully clear to the up-and-coming miners in the Pilbara that Fortescue would not allow them rail access without attempting to extract a heavy price.

And therein lie the contradictions at the heart of Forrest and the mining empire he has built in the Pilbara dirt. This is a man for whom life is a sequence of ambiguities and paradoxes. He wants to be seen as an everyman who took on powerful mining giants and triumphed for the benefit of all Australians, yet he regularly conflates the national interest with his own commercial interests. He is an elitist who craves the respect of the establishment but wants to be loved by ordinary people. A philanthropist who will do anything for a dollar.

What is next for Andrew Forrest? Still only 51, and with energy to burn, he will likely be a prominent figure in Australian public life for decades to come. His most obvious career move would be politics. He is close to Prime Minister Tony Abbott and the two men have chatted informally about Forrest's interest in joining the Liberal Party and possibly entering federal parliament. Forrest has sounded out those close to him about whether he should go into politics. If he does, few of his friends would be surprised.

Mark Caruso, the man who sold Forrest the tenements that made him a multibillionaire, believes Forrest's overwhelming motivation in life is restoring his family name to greatness in public life, and being prime minister would be the ultimate way of achieving this. "He has both the influence and resources to become a significant politician," says Caruso. "I honestly think he can be prime minister."

Albert Wong, Forrest's buddy from his Sydney deal-making days, is another who reckons he will aim for the top in politics. "One day I said to him, 'You've done it all now, you might as well be prime minister.' He didn't admit it to me, but I'm sure that has crossed his mind. Ultimately, Andrew is the type of guy who really wants to make his mark and leave a legacy."

Grigor believes his old business partner is more likely to follow in the footsteps of Sir John Forrest and seek to become the premier of WA. "He has a need to do what his forefathers have done," Grigor says. "I told him one day he would be premier of Western Australia and that was his overriding desire, and he looked at me and said, 'How do you know that?'?"

Even if he decides against a shot at politics, Forrest is deftly positioning himself as a 21st-century statesman. Yet there are still those who believe his enduring belief in his own infallibility will ultimately prove to be his downfall. "In the final analysis he will fall victim to his own personality, which is to keep pushing and pushing and pushing," warns Brian Burke, the former premier who worked closely with Forrest. "One day there will be something that will be impossible and Twiggy won't recognise it." Burke pauses and searches for an example. "I will never run 100 metres in 10 seconds," he says. "But if you told Twiggy, he'd say, 'Let me have a few months' training and I will do it.' In the final analysis, that inability to accept that something is impossible will cause him to fail."

The great unanswered question of Andrew Forrest's life is whether he is motivated most by money, power or the need for respect. The answer will, to a large extent, determine how he is remembered.

Edited extract from the unauthorised biography Twiggy: The High-Stakes Life of Andrew Forrest, by Andrew Burrell, Black Inc Books, $29.99