Cattle queen Gina Rinehart’s $285 million battle

Article courtesy of The Advertiser.

August 2nd, 2019.


In the heritage-listed homestead of one of Australia’s most renowned cattle stations, billionaire Gina Rinehart is unveiling one of her most extraordinary plans yet.

The mining and pastoral magnate, one of the world’s wealthiest people, is delivering a Powerpoint presentation to a select few in the art deco loungeroom of Fossil Downs station, the jewel of the Kimberley.

Decorative cattle horns above a fireplace peer over the top of the projection screen.

An antique pianola stands against one wall.

The adjacent entrance hall features an art-deco jarrah staircase and balustrade, constructed in Perth in the 1940s and transported to the station, 35km northeast of Fitzroy Crossing.

Specially engineered ceiling brackets and pulleys atop the pianola enable it to be hoisted off the ground — the two-storey clay brick homestead is on flood plains at the junction of the Fitzroy and Margaret rivers.

And water is very much on Rinehart’s mind today, because she has something huge to unveil.

For some time, the billionaire businesswoman has publicly questioned why the topic of water has not received greater national attention amid widespread and crippling drought.

She has railed against the equivalent of 70 billion Olympic-sized swimming pools flowing past productive land in Queensland’s northeast and “uselessly into the sea”.

In South Australia, she last year publicly challenged new Premier Steven Marshall to slash red tape that imposed a 10-month wait for approval for a single bore at Innamincka Station.

There has been some success.

A feedlot east of the Barossa Valley is expanding dramatically, thanks to a deal with SA Water for more supply.

Now, Rinehart’s ambition has expanded exponentially, this time in northwestern Australia, in the Kimberley, where she has bemoaned the 7000 gigalitres of water that is “wasted” across the average wet season, as it “uselessly flows through the Fitzroy River out into the ocean, past many stations”.

Rinehart has a solution.

She wants to plough up to $285 million into extracting water from the Fitzroy for an irrigated cropping operation to transform the station, the region and, she says, the nation.

It’s the centrepiece of her vision of developing the north and Australia’s rugged Outback, where the 65-year-old grew up and, despite her considerable wealth, where she seems most comfortable.

Access to water is the linchpin of Rinehart’s agriculture empire, one of the world’s largest, which includes 30 properties stocking more than 320,000 cattle across Western Australia, Queensland, New South Wales, the Northern Territory and South Australia.

It expanded in late 2016 to include the fabled S. Kidman & Co.

Now, at Fossil Downs, the centrepiece of her pastoral holdings, Rinehart wants to put her financial muscle where her mouth has been for some time, at a station where a third of the property cannot be used because of insufficient water development.

Rinehart’s Hancock Prospecting bought the 400,000ha station in 2015 — the first time it had been sold in its 133-year history.

At the time, the homestead was likened to Government House.

Speaking to SAWeekend, Rinehart recalls her mother, Hope Hancock, describing an invitation to visit Fossil Downs.

“The Fossil Downs homestead, with its large stones, is renowned as an icon of the Kimberleys,” Rinehart says.

“It has had illustrious visitors over the years, including members of the royal family, and I remember it as being a very special place to be invited. My mother said that, for people of the north, being invited to Fossil was exciting, akin to being invited by royalty. My mother loved her visits to Fossil.”

It’s a fitting analogy, given the rarity of an invitation into the fiercely private Rinehart’s inner sanctum.

Apart from SAWeekend, there are only two from outside her privately held company among the six to whom she is presenting the stupendously large-scale irrigation proposal.

Hancock Agriculture, part of the privately owned Hancock Prospecting company of which Rinehart is chairman, wants to secure a licence to extract 325 gigalitres annually from the Fitzroy River — the equivalent of 130,000 Olympic-size swimming pools or two-thirds of Sydney Harbour.

This would irrigate a cropping area of 21,200ha — more than 20 times the area of Adelaide’s central business district.

It would produce 327,750 tonnes of crops, such as sorghum, for cattle feed, about 25 per cent of Australia’s total estimated sorghum crop this financial year.

The mammoth operation would employ 105 people.

“Currently, the water that flows through the Fitzroy goes straight through to the ocean,” she says.

“To put this into perspective, every average year 13 or maybe 14 times the amount of water in the huge Sydney Harbour flows through the Fitzroy, past many stations, out into the ocean.

Rinehart says water would be extracted “only when the river runs high following heavy rains during the wet season”.

This would mean water would be taken out when “it is available and flowing”.

The flood waters would be diverted into storage facilities and used for irrigated cropping.

Internal studies assume the water allocation required would be less than five per cent of total river flows.

“To be able to feed cattle with local crops during drought times especially, would be wonderful. It is very sad to know cattle suffer in drought times and lose weight, month after month, especially when, with more water and cropping, this could be unnecessary,” Rinehart says.

Feeding cattle with crops improves meat quality, she says, which is increasingly important for sale into Asian markets which demand higher quality, less tough, beef.

“We must listen to these markets. Australia cannot eat all the beef that our stations and farms provide, so these Asian markets are critical to our northern cattle industries’ future, and all those who earn their living via cattle, directly and the many indirectly,” she says.

But there’s a catch. A big one, that threatens to torpedo Rinehart’s ambition.

The WA Government’s Plan for Our Parks, announced in February, proposes a Fitzroy River National Park, enveloping the magnificent Dimond, Margaret and Danggu Geikie gorges.

The latter, already enshrined in a 31.36sq km national park, abuts Fossil Downs and is just 20km northeast of Fitzroy Crossing, on a sealed road. Its spectacular sheer walls have been carved by the Fitzroy River, through part of an ancient limestone barrier reef which snakes across the west Kimberley.

During the weekend visit to Fossil Downs, two helicopters whisk us through the three gorges, which triangularly flank the station.

Other than gaping at their majestic, unspoilt nature, one cannot help but ponder the political powder keg that fighting a plan to protect these might explode.

For those with long memories, one of the nation’s most significant environmental protests over the ultimately aborted Franklin Dam in southwest Tasmania helped catapult the late Bob Hawke to the prime ministership in 1983.

Rinehart is a polarising conservative, whose scalp many in the environmental movement might love to claim, in the name of protecting this incredible landscape.

But it’s speculated Rinehart may give land, including the Margaret Gorge — the only one of the three gorges on the station — in return for the right to extract water.

The WA Government wants the park to include an “immediate buffer” zone, which would stretch into Fossil Downs’ lush flood plains.

It would potentially include Aboriginal cultural heritage sites and existing tourism and recreation areas.

This would enable partnerships with traditional owners for “innovative economic development opportunities”.

A WA Government 2018 Kimberley health profile found the area has a 3.7 times higher rate for alcohol-related admissions to hospital than the state.

Of the area’s population of more than 36,000 people, 45 per cent are Aboriginal. Of people aged more than 16, 46 per cent drink alcohol at risk of long-term harm.

The appeal of a job-creating project is obvious, be it a national park or large-scale irrigation scheme.

A management plan combining both is being developed, more happily for Rinehart. This incorporates, according to Regional Development, Agriculture and Food Minister Alannah MacTiernan, “a productive and sustainable mosaic of irrigated agriculture to enhance the pastoral industry in the Fitzroy River catchment, based on sound science”.

Back in the Fossil Downs presentation, Rinehart is seizing on this science.

She brandishes a CSIRO report, released in September last year, which supports the potential for large-scale cropping in the catchment.

This finds the average annual discharge from the Fitzroy River to the ocean is 6600GL. In 85 per cent of years, 1700GL of this could be diverted to ring tanks, next to soil suitable for agriculture.

This is about 25 per cent of the mean annual streamflow near the Fitzroy’s mouth.

“Agriculture relies on water, cattle and other stock do too. They must drink every day. It is distressing to see stock suffer in drought,” Rinehart says.

“The hot conditions in the north, even in good seasons, require adequate watering points, without long distances in between. Yet WA is introducing more national parks and WA and other states have lengthy and extensive approvals processes to allow investment to access more water for stock use. Our ability to develop irrigated cropping at Fossil and other suitable places in the Kimberleys is limited by the access to water, and the need for security of tenure.

“We are already carrying out cropping operations to support our existing feedlot operations in the Northern Territory, Queensland and New South Wales, and will look to opportunistically expand those operations when justified.

“Our focus on water on some of our other properties is mainly for livestock purposes and some of these are proving quite challenging with the government regulations involved. For example, on Innamincka Station, it took us 10 months to get approval to install a single bore.”

Rinehart turned the heat on Premier Marshall over Innamincka in last year, speaking after him at an American Chamber of Commerce dinner at the Adelaide Convention Centre.

“Access to water is an animal welfare issue yet, unfortunately, governments still make it difficult and costly to obtain water licences and approvals to build and develop new water points,” she said then.

Asked to elaborate, she bemoans the multiple levels of bureaucratic approval required for extra water at a 13,552sq km station established in 1872 — the first set up along the Cooper Creek. This includes a survey, subsequent documented report to the Pastoral Board and another to the Environment and Water Department.

“We have had to slow down our plans on that station to enable the regulators to review the proposals on a smaller scale, and I’m pleased to say that with the current government this is resulting in a faster approval process, but it will still generally take over three months and a lot of time liaising with various authorities for approval to be granted,” Rinehart says.

Water infrastructure for stock use, she says, requires major investment.

This includes extra bores, preferably powered by solar pumps, and a network of tanks, pipelines, shading and water troughs.

“Why do we want to put in more water infrastructure at Innamincka? Because in the heat especially, it is very hard on cattle to have to walk long distances to get to water,” she says.

“They also lose weight doing so. Also, it means for areas where no water troughs or permanent groundwater are available, pastures in such areas go under-utilised, leading to ineffective usage of pastoral leases, with stock preferring to overgraze near water,” Rinehart argues.

The accelerated approval process at Innamincka might not have excited the billionaire, even if the message to Marshall clearly had an impact on thinning out Rinehart’s much-despised red tape.

But the potential for an eight-fold expansion of Kidman’s Tungali feedlot, about 30km east of Angaston, has enthused her.

“This feedlot currently has a carrying capacity of 3000 head, but following successful discussions with SA Water and SA Government infrastructure specialists over a period of just over two months, additional water was allocated that could allow in excess of 25,000 head to be held,” she says.

Study of a first-stage expansion, which would triple the number of employees from two to six and grow cattle capacity from 3000 to 10,000, is now under way.

Stage two would expand this to 25,000 head and create another 15 direct jobs and many more for suppliers and processing.

In recent years, Rinehart has gradually assumed a higher profile, almost coinciding with her becoming principal owner of the legendary Kidman chain of cattle stations.

One of the most activist measures has been to found National Agriculture and Related Industries Day in 2017.

At a gala dinner for that event in Sydney, she said there was a growing divide between city and country, pointing to a 2017 survey that found 83 per cent of Australians believed agriculture and farming have no or little relevance to their lives.

Rinehart says people have forgotten the old adage that you need a dentist or doctor or plumber one or two times a year, but a farmer every day of the year.

And one of the greatest challenges for farmers is accessing water. Rinehart is pumping her considerable influence and dollars into the mission to increase supplies across her empire.

Even for the nation’s second richest woman, overcoming the forces of nature and political obstacles is a considerable challenge.