Gina Rinehart: Australia’s lonely little rich girl

by Susan Chenery / 28 July, 2012
After alienating most of her family, Australia’s richest woman now has her sights on the media.


Chased by a furious tropical storm, he dropped the tiny plane down and down. Above, behind and in front of him were lethal towers of turbulent clouds. Descending into the gorges of the Hammersley Ranges, skimming trees, he navigated great red cliffs and high serrated canyons of rock. Instinctively following water flowing to the Turner River, he pushed the fragile plane low across terrain that was no country for white men. It was while he was threading through a neck in a gorge so narrow that it nearly sheared a wing that he came alarmingly close to a different, rustier ochre in cliffs that looked like solid iron. It was November 1952 and Langley Hancock had discovered the largest deposit of high-grade iron ore in the world.

This is known as The Flight of Discovery – the legend, possibly embellished, reverently nurtured, on which one of the world’s great fortunes has been built. It is a story of a hard man in a harsh terrain. Hancock was a bush pilot and prospector who grew up on a vast sheep station in the dusty, inhospitable Pilbara region at the western-most point of Australia. His second wife, Hope, once told the Australian Women’s Weekly they had started married life in a caravan. These days, Hancock Prospecting is one of Australia’s largest resources companies, with interests in iron ore, coal, manganese, uranium, diamonds, copper and gold.

For the past few years, Kiwis have been flocking to the Pilbara in the hope of making their own fortunes in Australia’s booming mining industry. But none will ever earn more than a tiny fraction of the hundreds of millions now being amassed each year by Hancock’s daughter, Gina Rinehart. Rinehart has, if anything, only enhanced the family legend to the point she is now believed to be the richest woman in Australia. And she may be on track to becoming the richest – and most powerful – woman in the world.

Worth nearly A$30 billion and climbing, Rinehart is of particular interest to New Zealanders because of her recent raid on Fairfax Media, the transtasman company that counts among its leading titles the Sydney Morning Herald and Melbourne’s Age. In New Zealand, the company is probably best known for its Stuff website, and for such newspapers as the Dominion Post and the Sunday Star-Times. At press time, Rinehart was waging a very public battle with Fairfax’s directors over her 15% stake, and there was much speculation about what her intentions might be. For Rinehart, that is simply business as usual.

COURTS CONFLICT
This woman has become defined as much for conflict as she has for her considerable achievements in the macho world of mining. Over the past 20 years Rinehart has engaged in brutal litigation with every member of her immediate family except her youngest daughter, Ginia. She has left a trail of ruined relationships with colleagues, bodyguards, employees and her former stepmother. She has also burnt through countless barristers and law firms in every major city in Australia. In a nation where wealth is admired, Rinehart is not exactly revered. “The path she has chosen has made her one of the most polarising people in Australia,” journalist Marian Wilkinson recently told the Australian Broadcasting Corporation. “Whatever I do, the House of Hancock comes first,” she famously said as a young woman. “Nothing will stand in the way of that.”

Indeed. Earlier this year, when her children tried to eject her from their trust fund, it seemed she was willing to sacrifice almost her entire extended family, as well as a potential dynasty, in order to retain control of her enormous riches. Fourteen years ago, journalist David Leser interviewed Rinehart at the height of her poisonous decade-long struggle with her former stepmother. She hated the story, and has since declined almost every interview request. “I called her the lonely little rich girl,” says Leser. “There is no intimacy in her life. I don’t know that she has any close friends. I have interviewed thousands of people but I have never met anyone as difficult to warm to. She sees the world through a completely different lens.”

Leser recalls having to go through secure-coded doors and fingerprint scanners to get to her office. “It was the most bizarre interview I have ever done. She taped the interview. She was extremely brittle and supercilious and spoke in a hushed whisper. On questions of the heart she spoke in platitudes.” Even now, she is known to drive a bulletproof car, has former SAS soldiers to guard her, and her house in Perth is plastered with menacing security warnings. “Her friends say she is soft and kind and gentle,” says Adele Ferguson, whose biography, Gina Rinehart, was recently published, “but in the business world she is tough, ruthless and single-minded. She is as driven and obsessive as her father was. Every fibre of her being is about mining.”

A workaholic who fires off emails throughout the night, she does, however, enjoy cruises and has an apartment on the exclusive ship the World. She also has a fondness for musicals and classical music, and funded the show Xanadu, which flopped. But as many have observed, she is very much her father’s daughter. “Her politics are very similar to his,” says Ferguson. Hancock was alleged to have poisoned the Turner River to drive away Aborigines and end their land claims. He also fought a long and dirty campaign against Western Australian premier Sir Charles Court, who regarded him as a robber baron in the making. During this war, he set up two newspapers, the Independent and the National Miner, in order to attack those who threatened his interests, and to push his political and economic agenda.

HARD ACT TO FOLLOW
In 1979, Hancock published Wake Up Australia, which argued, among other things, that Western Australia should secede from the rest of the country. According to Leser, he also wanted to buy the National Party, to detonate nuclear bombs in his mines, and to have mixed-race Aborigines sterilised – a claim that has particular resonance given revelations that Rinehart may have an Aboriginal half-sister. That has been disputed by Rinehart’s son. Hancock also did business with Romanian dictator Nicolae Ceausescu. But it was the deal he and his business partner struck with British giant Rio Tinto to develop the Pilbara that proved the most lucrative. The 2.5% royalties from that deal translate to roughly A$125 million a year.

Rinehart was born in the Pilbara in 1954. Because her mother was ill with breast cancer, she became her father’s “cadet” from an early age, and acted as hostess on the Learjet he used for business. “Most people would be intimidated by meeting the President of Singapore or Margaret Thatcher at the age of 12,” says Ferguson, “but she just learnt how to deal with it. She didn’t know any different.” In the early 70s she dropped out of her economics degree because the professor was “too left-wing”. At 19, she married Englishman Greg Wilton and had two children, John and Bianca. When the marriage broke up he became the merest footnote in the mythology of the House of Hancock.

In 1983 she married again, in Las Vegas. Frank Rinehart was 66 – an urbane, sophisticated Harvard graduate and New York tax attorney who had once been convicted of tax fraud and barred from practising in three states. They had two daughters, Ginia and Hope. Hancock feared he was after Hancock Prospecting. But Frank was an expert litigator, and his wife was a willing pupil. “He was the finest man I ever knew,” she told a journalist after his death of a heart attack in 1990. As Leser notes: “The propensity to litigate, and a sense of entitlement, can be a toxic combination.” Or as Ferguson puts it: “Lang gave her the foundations to turn the House of Hancock into a mining powerhouse, while Frank helped teach her how to protect it from potential predators.” She failed to protect it from a Filipina housekeeper, however. Rose Lacson was a flamboyant character with extravagant tastes, temporarily down on her luck and with a colourful past. She quickly moved from the kitchen to Rinehart’s father’s bedroom, following the death of his wife.



GOTHIC DRAMA
Now it was Rinehart’s turn to be suspicious. Both convinced that the other had married a gold-digger, it was war on a Shakespearean scale. Hancock built Rose a mansion modelled on the one in Gone with the Wind. This astounded even Perth, where ostentatious mining magnates are thick on the ground. As far as Rinehart was concerned, Rose was spending the family inheritance as fast and as tastelessly as she could. But Hancock’s friends felt that Rose made him happy. He dyed his hair, traded in his safari suits for a designer wardrobe and gave huge parties where he danced all night. In venomous exchanges with her father, Rinehart described Rose as a “Filipino whore”, and claimed she had worked in the red-light district in Manila. Hancock wrote back that he’d rather remember his daughter as a “neat, trim, capable, attractive young lady” instead of the “slothful, vindictive and devious baby elephant” she had become. He kicked her off the board and told a television interviewer that Rose was his new “cadet”.

While he lay dying in 1992, the two women were still fighting. In his last hours, Rinehart convinced him to take out a restraining order against Rose. At his bedside hearing he told the magistrate Rose had been screaming at him for days, was a pethidine addict and was berating him about money and threatening divorce. It was gothic. Two funeral companies, one ordered by Rose and one by Rinehart, arrived to collect the body. At the funeral Rose sat outside in a Rolls-Royce. There were two separate public farewells. And then the two women slugged it out in the courts for 14 years. “It was appalling on both sides,” says Leser. “They deserved each other. It was a match made in hell.” Convinced that Rose had poisoned her father, Gina lobbied the coroner for seven years for an inquest. When she finally got it, it was revealed she had paid large sums to witnesses for expenses. However, he was found to have died of natural causes and she was forced to settle privately with her arch-rival.

SELF-MADE WOMAN
Rinehart resents being described as “an heiress”, with some justification. When her father died in 1992, his finances were in disarray and she successfully petitioned for his estate to be made bankrupt. Although she inherited a healthy income from Hancock Prospecting (around A$100 million a year), the company never owned its own mines until she took the reins. Hancock Prospecting now has 50% equity in the original Hope Down mine, bringing in nearly A$2 billion a year. She sold the company’s coal assets in Queensland for more than A$1.2 billion, and has developed the Roy Hill mine, which will be her crowning achievement when it opens in 2014.

Like all great industrialists, she is building a railway. And she has also become increasingly interested in politics, memorably standing on the back of a truck in 2010 to protest the proposed mining tax. The same year, she acquired a stake in Channel Ten. In promoting the interests of her industry, she has become increasingly forceful, writing articles, giving speeches, making political donations and forming a lobby group that, according to Ferguson, “pushes an economic and political agenda that positions the mining industry as the driving force in the Australian economy”.

As journalist Paul Barry told the ABC: “She wants a say. She sees the north and west as where the wealth is being created and thinks there is not enough recognition being given to where the future lies.” Where the future lies for the Hancock family is still unclear. Mindful of his legacy, Hancock stipulated in his will that nearly a quarter of the company, worth around A$1.9 billion a year, would go to his grandchildren through a trust. He had loved his grandson John, who was the only male heir. John was originally his mother’s ally. They fell out, however, when he began to question her rigid control of the company and the trust. The next child, Bianca, spent a year in the Pilbara mines driving trucks, but then quietly moved to Darwin. When Ryan, the husband of Hope, launched a legal action against his motherin- law in September last year – an action joined days later by John and Bianca – she cut them all off and removed them from family boards. The children, in turn, asked for her to be removed as a trustee, claiming “deceptive, manipulative and disgraceful conduct”.

Believing they would be inheriting their fortunes on September 6, they discovered their mother had changed the vesting date to July 1, 2068, to avoid capital gains taxes she said would bankrupt them. They were given one day to decide what to do. “Sign up or be bankrupt tomorrow,” she threatened. “The clock is ticking. There is one hour to bankruptcy and financial ruin.” Court documents revealed she offered them each A$300 million a year to sign away their rights to the trust. They declined. The documents included telling email exchanges. In one plaintive email to “Mem”, Hope protested that she was down to her last A$60,000 and needed a cook, a housekeeper and a bodyguard. “It’s hard enough being a kid, let alone the peer pressure that comes from being the wealthiest one in the country,” she complained. In return, the disappointed matriarch insisted they had neither “the requisite capacity or skill” nor “the knowledge, experience, judgment or responsible work ethic” to become trustees. In May, she changed her mind and vested the trust immediately, but in an email to ABC’s Four Corners said it had not been picked up yet.



FAIRFAX PLAY
According to Ferguson, Rinehart was on a cruise to Lisbon on the World when the news broke of her latest family drama. Around the same time, she was causing anxiety in newsrooms across the country as she increased her shareholding in Fairfax. The media firm had just announced nearly 2000 staff would lose their jobs over the next three years. Painting herself as a white knight to a company whose shares were plummeting, she asked for three seats on the board. The board baulked. It was speculated that she wanted the right to hire and fire editors, and refused to agree to the company’s charter of editorial independence. Like her father, who thought journalists were “communists” and “socialists”, she has displayed a deep animosity and distrust of the press in the past. Even one of her oldest friends (and her authorised biographer), John McRobert, told the Sydney Morning Herald that her foray into the media was a way of buying influence in the political debate. “The media has not been kind to the mining industry and I think she’s made this move into Fairfax to try to get a voice for mining,” he said. “The country has been brainwashed for so long by left-wing media rubbish.”

Speculates Leser: “As her wealth has grown, the kind of country she would like to see can best be achieved by owning the most influential group in the country. It would be a payback to the ‘communists and socialists’ who have mocked, pilloried and undermined her accomplishments. With control of the papers, she can realise Australia in her own image.” But newspapers, unlike minerals, cannot be ripped from the ground. They are attached to people, and people have always been her problem. In spite of – or perhaps because of – all her power and money, some of them just won’t do what she wants. The battle ain’t over yet.

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