It’s solely a few months since mining heiress Gina Rinehart™ used her weird award of “Enterprise Particular person of the Yr” to whine at size about how nasty the federal government was to her. “We’d like insurance policies that make funding in our nation price doing,” she warned. “Rolling out the purple carpet for funding … We have to perceive that rolling out the purple carpet for funding doesn’t imply growing authorities purple tape and laws. It doesn’t imply the overburdened taxpayers paying for lawfare to delay or cease initiatives.”
Rinehart didn’t say what she thought it did imply, however we’ve obtained a clearer concept after lithium developer Liontown Assets obtained $230 million in authorities company loans, and Arafura Uncommon Earths acquired $840 million in loans and straight handouts to develop a lithium mine and refinery within the Northern Territory.
Now, you received’t imagine this, however the Monetary Evaluate, usually fast to scold the federal government for spending cash unnecessarily, which barely per week in the past complained of “the government-driven saviour economic system wherein individuals really feel entitled with out having to do a lot for it”, hasn’t uttered a vital phrase about these handouts.
Rinehart is a beneficiary of each by way of her ill-timed and now loss-making investments in Liontown and Arafura. Final yr, she purchased 19.9% of Liontown, which needs to develop a serious lithium prospect referred to as Kathleen Valley in central WA, and compelled US lithium big, Albemarle, to desert a A$6.6 billion takeover of Liontown.
Because it turned out, this helped Albemarle keep away from what would have been a vastly costly mistake. Rinehart spent greater than $1 billion shopping for virtually all of her shares for round $3, which was Albemarle’s supply value. Liontown was buying and selling round $1.36 on Thursday, so the heiress is down a whole lot of thousands and thousands of {dollars}.
After Liontown secured the $230 million in Export Finance Corp of Australia and Clear Vitality Finance Company loans and one other $200+ million in personal loans, its shares surged to a excessive of $1.52 earlier than falling again. (Late final yr, Rinehart additionally snapped up an 18.3% stake in lithium-wannabe Azure Assets. Since then, her firm has joined with Chinese language-Chilean lithium big SQM to make a $3.71 a share supply. The worth of the Azure stake: simply over $300 million).
Rinehart’s funding in Arafura Uncommon Earths started in late 2022 when she took a ten% stake within the firm by way of a share concern at 37 cents a share. Even after shares in Arafura Uncommon Earths surged greater than 77% on Thursday to twenty-eight cents after the $840 million was revealed, she’s nonetheless dropping cash on her Arafura stake.
Luckily the federal government, as a part of its “vital minerals technique” (“vital minerals” being a subjective class that dangers inflating over time, because the Productiveness Fee identified) has despatched taxpayers to Rinehart’s rescue and rolled out the purple carpet for funding — by offering the funding the market ought to be offering.
Among the many Twitterati the grievance is that the federal government is handing $840 million to Rinehart. The truth is it’s giving it to an organization she’s invested in, together with loads of different buyers, and a few of it must be repaid. And you may guess that loads of the federal government’s critics really like the concept of taxpayers investing in order that Australia develops an trade additional up the manufacturing chain than merely digging up lithium and sending it to China, on the premise that we will’t belief China with vital mineral manufacturing.
Arafura and Liontown can’t fund their initiatives as a result of their share is so low — or, in different phrases, buyers weren’t ready to again them. Why isn’t Rinehart placing in additional of her personal cash, and as an alternative letting taxpayers danger their hard-earned? And at her subsequent speech attacking Labor, will she trouble acknowledging simply how a lot purple carpet it rolled out for her?