March 7, 2017

Gina Rinehart’s Hancock Prospecting has confirmed its acquisition of the Aroona cattle station in Australia’s Northern Territory from John and Kate McLoughlin. Land records indicate that the property sold for $13.5 million, however this price does not include cattle or other assets.

Located approximately 100 kilometers west of Katherine, the Aroona Station encompasses 147,510 hectares of land and may add 15,000 head of cattle to Hancock’s growing holdings.

Colliers International’s national director of rural and agribusiness, Rawdon Briggs, confirmed to AFR that he was the listing agent for Aroona Station but declined to comment further.

The announcement detailing the 147,510-hectare Aroona acquisition follows an incredibly dynamic year for Rinehart and Hancock Prospecting, and comes only months after Australia’s Treasurer Scott Morrison granted approval for the sale of the S. Kidman cattle empire to Australian Outback Beef (AOB), which was a joint venture between mining magnate Gina Rinehart and China’s Shanghai CRED for A$386.5 million.

A Year’s Work

After a long-fought battle, Rinehart gained control of Australia’s most iconic cattle empire. Established in 1899 by Sidney Kidman, the company has grown to run 185,000 head of cattle on 101,000 square kilometers of land, or 1.3 percent of the land area of the country, stretching across Queensland, South Australia, Western Australia, and the Northern Territory. Equal in size to the country of South Korea, S. Kidman is the largest private agricultural landholder in Australia including 19 properties, 10 cattle stations, a bull breeding stud farm, and a feedlot.

Under the structure of the AOB joint venture, Gina Rinehart’s Hancock Prospecting will own 67 percent of S. Kidman, with Shanghai CRED owning the remaining 33 percent. And pursuant to the acquisition, Australian Outback Beef has pledged to increase the S. Kidman herd size by 20,000 head over the next 18 months and to invest up to $19 million in capital improvements that will enhance the operation’s efficiency and lift carrying capacity. The venture also expects to create 35 new jobs by June 2018.

Last year also saw Rinehart acquire the Inverway and Riveren cattle stations in the Northern Territory totaling 550,000 hectares. Combined with the Aroona Station, the three properties will add more than 55,000 head of cattle to Hancock Prospecting’s holdings, according to Briggs, who was the broker for the sale of all three.

Further, 2016 also saw Hancock Prospecting acquire Phoenix Park – a registered live cattle export yard and depot licensed for 20,000 head, that also includes a large-scale fodder growing operation.

Located only 340 km from the live export port of Darwin, the purchase of Phoenix Park, which Hancock Prospecting described as a “large-scale export pre-feeding depot,” is indicative of Rinehart’s intention of building an integrated supply chain.

“Phoenix Park builds on our previous investment in the N.T., including the recent acquisitions of Riveren and Inverway cattle stations,” the company said in a statement at the time. “The new depot covers over 3,443 hectares of freehold land.”

Complimentary Nature

Building on these investments in the North, the addition of the Aroona Station was pursued by Hancock for the potential synergies it will provide to the group’s existing holdings.

“It is near to the Phoenix Park export depot and it will assist part of the wet season growing program for Riveren and Inverway as well as help to provide better market timing options for some of Hancock Beef’s Kimberley cattle stations,” said the company in a release announcing the acquisition.

Hancock’s other stations in the Northern Territory include the Fossil Downs, Liveringa, and Nerrima stations, according to AFR.

The complimentary nature of the Aroona acquisition was echoed by Adam Giles, general manager of external affairs for Hancock Prospecting, who said, “Aroona will tie into Hancock’s accredited main selling centre, [sic] the Phoenix Park export depot located at Katherine, and be able to assist timing opportunities for getting cattle to markets.”

Giles also expressed to ABC that Hancock Prospecting remains open to further expansionary moves within the cattle sector.

“Hancock Prospecting is always looking out for strategic opportunities for acquisition if they come up,” he said.

“That doesn’t mean something will definitely occur, but it’s fair to say we’re keeping our eyes open and if there’s something that comes up that fits in the strategic dynamic of the pastoral business, we’ll certainly be keen to run a ruler over it.”

-Lynda Kiernan

Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration please contact Ms. Kiernan at lkiernan@globalaginvesting.com.