As strong demand from China spurs development of Australia’s vast mineral resources amid record-high commodity prices, a new swath of mining executives have come to dominate Australia’s mega-rich. Australia now has 20 billionaires, says rich-list documenter Forbes, up from 13 last year, and that growth comes from more than mere inflation and an initial economic recovery from the 2008 recession.
Instead, Australia’s rich list can be looked at as a partial reflection of what is happening within the Australian economy. For decades, media moguls such as News Corp.’s (NWSA-Q, NWS-A) Rupert Murdoch dominated the list when rapid global expansion and a steady stream of advertising dollars reigned supreme. In the early and mid-2000s, property developers moved to the top of the list in an era of cheap credit and soaring real estate values.
Today, Australia’s rich mineral resources – specifically iron ore and coal – are the source of wealth for many of the country’s ultra-rich. By some counts, four of Australia’s top five wealthiest people have made their fortunes in the resource sector. Australian business executives often keep a much larger equity position in their companies after taking them public, with many retaining as much as 50% control of the stock.
Though different publications often come up with different rankings as to who is the richest, the variations matter little. For whatever the reason, people love to speculate on the spectacularly wealthy year after year, following their ups and downs, mistakes and successes and the impact of industry trends. Here is a list of Australia’s top 10 richest mining executives based on rankings from Forbes and one of the most popular business magazines Down Under, BRW.
1. Gina Rinehart
Australia’s richest person with a fortune estimated at A$10.3 billion, Gina Rinehart soared to the top of this year’s list for the first time on the back of higher iron ore prices and advancements in her company’s projects. She got her start in the industry in 1992, when she became chairman of her father’s ailing private iron ore mining company, Hancock Prospecting, which she had previously held a minority interest in. Rinehart slowly turned around the Perth-based company and in 2007 opened the world-class Hope Downs iron mine in Western Australia’s Pilbara region, a fifty-fifty joint venture with Rio Tinto (RIO-N, RIO-L, RIO-A). With Hancock Prospecting’s purported earnings totalling over A$1 billion a year from the soon-to-be expanding Hope Downs mines (a third mine is currently under construction), and three more mega-projects planned to start production by 2015 (two giant coal projects in Queensland and another world-class iron ore project in Western Australia), Rinehart looks to be a major force in Australian mining for some time to come.
2. Ivan Glasenberg
A new arrival on Australia’s rich list, Ivan Glasenberg was born in South Africa and has lived in Switzerland for the past 20 years. His nationality was only revealed recently, in documents released as part of Glencore International‘s (GLEN-L) $60-billion public-listing process. Glasenberg apparently spent a short stint in Australia during the 1980s as a trader. Now serving as the CEO of the world’s biggest commodity trader, Glasenberg is worth a reported A$8.8 billion, most of which is tied up in his 15% stake in the company.
3. Andrew Forrest
Boasting a fortune estimated at A$6.2 billion, Andrew “Twiggy” Forrest, the head of Fortescue Metals Group (FMG-A), is a self-made man. Forrest has forged Fortescue into one of the world’s largest iron ore producers, with operations in the Pilbara region of Western Australia turning out 55 million tonnes per year. He was also the public face of the nation’s mining industry in 2010 when it denounced government plans to impose a 40% Resource Super Profits Tax on the sector. In one publicity-charged moment, Forrest and iron ore heiress Rinehart climbed onto the back of a flatbed truck to address an anti-tax rally, leading a chant of “Axe the tax!” In other well-publicized news, the Australian Securities and Investment Commission found Forrest guilty in February 2011 of misleading and deceptive conduct as well as breaching continuous disclosure provisions while running Fortescue in 2004. Forrest is appealing the decision.
4. Clive Palmer
The founder and chairman of privately held mining group Mineralogy, Clive Palmer has seen his wealth grow to over A$5.05 billion over the past 20 years. A law school dropout who originally made his fortune in real estate, Palmer turned to mining years ago. Now his company has an iron ore portfolio estimated to contain more than 160 billion tonnes of magnetite ore in Australia’s Pilbara region.
In June, Palmer had to pull the plug for a fourth time on an initial public offering for Resourcehouse, one of the many companies under his Mineralogy umbrella, citing unfavourable market conditions. Resourcehouse is focused on developing a coal project in Queensland designed to produce 40 million tonnes per year of thermal coal, mostly funded by state-owned Chinese companies. Palmer also made headlines for his A$1-million donation in 2010 to help the coalition of mining companies fight the resource super profits tax.
5. Chris Wallin
Once the head geologist for the Queensland Mines Department, Chris Wallin has made a A$2.7-billion fortune from the region’s premium hard-coking coal. Wallin’s privately held mining company, QCoal, sold a 20% stake in its Byerwen coal project in Queensland to Japanese steel company JFE Steel last year for A$625 million. When fully operational, the project is expected to produce 10 million tonnes of hard coking coal per year.
6. Kerry Stokes
Worth roughly A$1.8 billion, Kerry Stokes runs a vast empire of businesses spanning from electronic and print media to property, mining and construction equipment. His most prominent role, however, is as chairman of the Seven Network, one of the largest broadcasting corporations in Australia.
Stokes also started a Caterpillar (CAT-N) dealership in Western Australia in the 1980s called Wes Trac, which is now one of the largest suppliers of Caterpillar products in the world, and has roughly 3,500 employees.
7. Kerr Neilson
A successful fund manager and co-founder of Platinum Asset Management (PTM-A), Kerr Neilson has a net worth of A$1.52 billion. Initial backing of the firm came from world-renowned investor George Soros, with Neilson’s investment style regularly likened to Warren Buffett. Platinum Asset specializes in international equities and manages a portfolio in excess of A$18 billion.
8. Nathan Tinkler
At 35, Nathan Tinkler is Australia’s youngest billionaire with a net worth of A$1.01 billion. Tinkler’s company Custom Mining bought a Queensland coal project in early 2006 and sold it in late 2007 to Macarthur Coal (MCC-A) for $275 million in cash and shares. Tinkler cashed in the shares in early 2008 for another few hundred million dollars and has since reinvested heavily in horse racing, sports teams, a port development company and a fast-car club. The young billionaire was featured in many Australian newspaper headlines for investing some A$4 million in the now-bankrupt Supercar Club, which for $50,000 a year allowed its members to play with a vast collection of Lamborghinis, Ferraris, Rolls-Royces and other race cars.
9. Tony Poli
Tony Poli is the co-founder and executive chairman of Perth-based Aquila Resources Ltd. (AQA-A), a company focused on coal in Queensland and iron ore in the Pilbara. (It is not to be confused with Aquila Resources Inc. (AQA-T), a Canadian zinc and gold explorer.) Poli’s 29% stake in the Australian Aquila is the source of most of his A$880-million fortune. The company is looking to develop its flagship A$6-billion, 30-million-tonne-per-year West Pilbara iron ore project, as well as hold on to its 50% interest in the A$1.25-billion Eagle Downs coal development project in Queensland. Eagle Downs is a joint venture with Vale (VALE-N), though the project is currently stalled by a bitter legal dispute.
10. John Grill
The CEO and major shareholder of engineering firm WorleyParsons, John Grill saw his wealth rise to A$794 million this year despite his having to transfer US$200 million in shares to his ex-wife as part of their divorce.
A shocking departure from the list this year was Ken Talbot, who died in a plane crash in Congo-Brazzaville. The son of a truck driver, Talbot founded Macarthur Coal in 1995. Years later he sold his stake in the company for nearly A$1 billion, and rather than retire, he continued to look for mining opportunities Africa.
Talbot had been due to appear in court the month after his plane crashed to face charges for bribing a Queensland MP, which he denied.
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