Article by Brad Thompson, courtesy of The Australian.
30.10.2025
Gina Rinehart’s Roy Hill iron ore operation slumped to its worst result in five years, but the billionaire is pinning her hopes on the development of a nearby deposit to extend the life of the jewel in her Pilbara crown.
Australia’s richest person said the economy’s declining competitiveness and reliance on handouts was putting standards of living at risk.
Roy Hill reported net profit of $1.8bn for 2024-25, down from $3.23bn, and its smallest haul since 2019-20, when the business declared a maiden dividend of $475m just five years after delivering its first iron ore shipment out of Port Hedland in Western Australia.
In the intervening years, Roy Hill has recorded profits of $4.4bn in 2020-21, $3.2bn in 2021-22, $2.7bn in 2022-23.
Roy Hill shipped 61.6 million tonnes of iron ore last financial year, down from 64 million tonnes, as it struggled through a difficult cyclone season in the Pilbara. The 2024-25 result underlines concerns that Roy Hill’s best days may be behind it. The core mine is estimated to have about seven years of working life remaining, but Mrs Rinehart is counting on her new McPhee mine to reinvigorate output when it produces first ore next year.
Roy Hill could also tap into satellite deposits or resort to processing low-grade stockpiles.
“McPhee will extend the life of Roy Hill, a mega mine that has delivered more than $12bn in taxes and royalties to governments and over $26bn to suppliers across Australia over the last ten years,” Mrs Rinehart said in commentary released with the private company’s financials.
“Tax revenues which have enabled better hospitals, more police and nurses, improved aged and disabled care. Without such tax payments, individual or company taxes would have needed to be higher or services reduced. Or our record (national) debt increased further and with this, the huge interest repayments.”
Roy Hill ships most of its iron ore to Japan, South Korea and Taiwan under longstanding arrangements with the investment partners behind the mine.
“Development of McPhee will ensure Hancock Iron Ore remains a trusted and reliable supplier of iron ore in the global market for the long term while creating ongoing benefits for our many valued employees, business partners and contractors along with the continued flow of taxes and royalties to the government,” Mrs Rinehart said. “All contributing to Australians’ standards of living.”
The latest Roy Hill results reflect the weaker iron ore prices and record rainfall that culminated in major production interruptions after Cyclone Zelia crossed the coast north of Port Hedland in February.
Mrs Rinehart’s Hancock Prospecting owns a 70 per cent stake in Roy Hill alongside Marubeni (15 per cent), POSCO (12.5 per cent) and China Steel Corporation of Taiwan (2.5 per cent).
The $600m McPhee project is about 100km north of Roy Hill. It is expected to start production in the next eight months and eventually churn out about 10 million tonnes of iron ore a year.
Ore from McPhee will be carted by truck to Roy Hill for processing, blending and transport by rail to Port Hedland. McPhee was part of Hancock-owned Atlas Iron until June 30, when that iron ore business was amalgamated with Roy Hill to create Hancock Iron Ore.
About 3000 Roy Hill workers participate in a generous profit-sharing scheme implemented by Mrs Rinehart. Workers typically receive their bonuses, which can be worth tens of thousands of dollars, in the countdown to Christmas.
Hancock Iron Ore chief executive Gerhard Veldsman said last year’s Roy Hill result was a credible one in the face of adverse conditions. “Despite significant challenges from record breaking and prolonged periods of heavy rainfall, our people responded the way they know best – by staying agile, making smart decisions, focusing on safety and cost control,” he said.
Roy Hill committed to $710m in capital expenditure in 2024-25, including for refurbishment and upgrades to rooms, dining spaces and recreation facilities at the worker accommodation village.
The mining operation paid $599m in state royalties and taxes, and native title obligations. Roy Hill additionally tipped $839m into the Commonwealth coffers through corporate taxes.
Mrs Rinehart said Australia was suffering from rampant government expenditure, including subsidies and handouts, on top of higher costs for businesses in the push towards net zero emissions.
“For the benefit of all Australians, it is crucial to highlight and better communicate these economic realities. Less real investment, record debt and substantial interest payments, declining international competitiveness and record business failures, do not enhance our standards of living,” she said.
