Monsters of Rock: Gina Rinehart preps 20Mtpa Mulga Downs mine for development, and a sudden resignation in coal country

Hancock Prospecting, Gina Rinehart’s private family company that made more profit than three of the four big banks last year, is zeroing in on the development of another iron ore mega mine.

This time it’s the Mulga Downs project on the Hancock family’s historic pastoral lease, which has just been sent to the WA EPA to start the approval process.

According to documents released by the EPA today Rinehart wants to develop the Mulga Downs and Murray’s Hill mines 210km south of Port Hedland to ensure its supply of iron ore through the port.

The new mines, which according to Hancock’s annual report last year have a resource of over 1Bt of iron ore, would deliver 20Mtpa over a 30 year life.

Murray’s Hill, would deliver about 5Mtpa over five years, would be developed separately. The EPA approved Murray’s Hill back in 2013 and deemed its impact not significant enough to assess, with Hancock’s supporting document saying it is seeking to commence its development “imminently” pending a clearing permit and mining proposal.

If approvals come through construction would begin in mid-2023, with exports of iron ore to leave Port Hedland from the last quarter of 2025.

Hancock’s cash cow is its 70% majority stake in the 60Mtpa Roy Hill iron ore mine, along with its 50% share in the 47Mtpa Hope Downs complex managed by JV partner Rio Tinto (ASX:RIO) but Rinehart has aggressively expanded her iron ore empire in recent years.

She has signed a deal to help the API JV study and potentially develop the long marooned Hardey’s iron ore mine, and reported a $982 million profit in FY21 at the Atlas Iron operations it has expanded since buying the junior iron ore miner and taking it off the ASX in 2018.

The EPA is also assessing a proposal to expand Hope Downs with the new Hope Downs 2 development, which Rio Tinto has been told will require a public environmental review, the highest level of scrutiny the WA EPA can request.

Rinehart’s interests, largely driven by Roy Hill and her other iron ore investments delivered Hancock Prospecting a monster $7.3 billion profit in FY21 after iron ore prices scaled record highs.

Mulga Downs is the latest in a string of mid-tier Pilbara iron ore proposals to emerge or reemerge in recent times, which notably include expansions at Hancock’s own Atlas Iron, the APIJV and MinRes’ (ASX:MIN) 30Mtpa Ashburton hub in the West Pilbara.

New Hope seeking new CEO after sudden resignation

Coal miner New Hope Corporation (ASX:NHC) is on the lookout for a new chief after announced the sudden resignation of its CEO Reinhold Schmidt “following a short period of personal leave”.

Schmidt, who only hopped over to New Hope after seven years at the helm of Yancoal (ASX:YAL) in 2020, has left the ASX-listed coal producer “effective immediately”. He was on an easy $1.5 million a year including salary, super and “other benefits”.

It comes just one month after New Hope secured a major land court win in the protracted approvals process for its New Acland 3 mine, which is now being considered by the Queensland Government.

Rob Bishop, NHC’s CFO will step into the acting CEO role at a “higher duties allowance” of $230,000 a year.

“Mr Schmidt led the Company during a challenging period for both the business and the industry, and delivered organisational changes that positioned the business to withstand the downturn in commodity prices experienced early FY21 and achieve outstanding returns as markets have improved,” NHC chairman Robert Millner said.

“We are grateful to Mr Schmidt for his contributions to the business and wish him well in the future.

“The outlook for the Company is positive and the Board looks forward to working with Mr Bishop and the leadership team to successfully deliver the Company’s purpose and strategy.”

NHC shares were down 3% today, with other coal stocks including Whitehaven Coal (ASX:WHC) (down 5.08%) also off after Indonesia eased a coal export ban yesterday.