Rinehart’s Hancock invests $300m in UK fertiliser

Hancock Prospecting, the holding company owned by Australia’s richest person, has invested $300 million in UK natural fertiliser business Sirius Minerals.

The investment from Gina Rinehart’s company will be reciprocated with $50 million in Sirius Minerals shares, as well as 5 percent of Sirius Minerals’ revenue from the first 13 million tonnes of fertiliser produced each year, and 1 percent after that.

The contract, which lasts for at least 70 years or the life of the project, also includes purchasing rights to 20,000 tonnes of fertiliser annually for Hancock’s agriculture operations in Australia.

Sirius is in plans to begin developing its North Yorkshire polyhalite facility, with mining and production operations that could produce around 10 million tonnes of fertiliser a year within six years. Rinehart said in a statement Sirius “has the potential to become one of the world’s leading producers of multi-nutrient fertiliser, and could have a life of 100 years”.

“This fits with my approach of investing in strategic areas for the long term, and I hope the product is of assistance to many Australian farmers,” she said.

The mining site is thought to be the world’s largest resource of polyhalite, a mineral rich in the potassium, sulphur, magnesium and calcium used to create Sirius Minerals’ patented fertiliser.

Sirius Minerals expects that its polyhalite facility will eventually be capable of producing 20 million tonnes of fertiliser a year, most of which is intended to be exported into the global market.

Rinehart added that Sirius Minerals’ fertiliser had been tested and shown to improve crop yields across crop types, and that by putting money into the UK, Hancock is investing in a “stable jurisdiction with a competitive tax rate”.

Sirius Minerals will have to build the mine, a 37 kilometre underground conveyor system, as well as handling and port facilities. The company is in the second financing stage for the project and is still seeking final planning approvals. Sirius Minerals is looking to aggregate senior debt facilities of up to $2.6 billion by the end of 2018.

Rinehart’s Australian agriculture portfolio has expanded this year, with her Hancock company recently forming a syndicate with Chinese real estate firm Shanghai CRED to offer A$365 million ($277.14 million; €248.15 million) for beef producer S Kidman’s cattle portfolio. Australian syndicate BBHO has made a A$386 million rival bid.