Gina Rinehart is far from a household name in the U.S., but she will be soon if Citigroup’s projections are correct. She’ll also be the richest person in the world, eclipsing the fortunes of well-known billionaires like Carlos Slim, Bill Gates and Mark Zuckerberg.
Mining tycoon Rinehart is Australia’s richest person, worth $9 billion. Her fortune quadrupled last year thanks to high iron ore prices and rising exports to China. But Australian journalist Tim Treadgold, who recently wrote a Forbes Asia story on Rinehart, believes her net worth could climb as high as $100 billion.
In a story for Australia’s Smart Company, he extrapolates findings from Citigroup Global Markets research on mining projects. The report names Hancock Prospecting, the company Rinehart inherited from her father, as the world’s fifth largest mining outfit. Treadgold’s full story is definitely worth reading, but the thrust of his argument is as follows:
If Rinehart was a company listed on the ASX, and valued using the same 11-times price-to-earnings ratio as her partner, Rio Tinto, she would be worth $30 billion, putting her in the top 10 of the Forbes rich list headed by Mexican telephone magnate, Carlos Slim, at $US74 billion, with Microsoft founder, Bill Gates, second at $US56 billion.
Rinehart, however, has three more mines on the way, and potentially more in the exploration phase.
If Rinehart’s three new projects mentioned by Citigroup match the performance of Hope Downs, and if mineral prices stay high (two big assumptions) it is possible to see Rinehart’s portfolio of coal and iron ore production spinning off annual profits approaching $10 billion.
If those best guesses prove to be correct, Rinehart is heading for a personal net worth valuation of more than $100 billion, using the Rio Tinto 11-times PE multiple.
Treadgold goes on to say that these numbers are, of course, contingent on “estimates, assumptions, forecasts and predictions.” And yes, $100 billion does sound exceptionally high. Still, he makes a compelling case that Rinehart is one to watch. Even at a $30 billion net worth valuation, based on profit forecasts for her Hope Downs mine, she’d be the world’s richest woman, a title currently held by Walmart heiress Christy Walton. And whereas Walton inherited her wealth, Rinehart is almost entirely self-made. As Treadgold wrote in his Forbes Asia story, Hancock Prospecting was “in shambles” when her father died. She’s spent the last two decades building it up, and it’s paying off.
Via Forbes
Luxury News / Golden Choice by Lux Creative International
