Gina Rinehart’s $50 million investment in Fairfax Media would seem to confirm one of the theories regarding her sudden interest in the media sector, and blow up a few others.
For example, it now seems unlikely that the main motivation for buying into Ten Network was to make money by supporting James Packer’s turnaround strategy for the broadcaster.
Instead, by buying into Fairfax so shortly after she spent $170 million on her Ten investment, Rinehart appears to be underlining the message that she wants a bigger audience for her pro-mining sector views.
While buying 2% of Fairfax won’t get her a board seat like she has got at Ten, it does add to her clout in the business community, and probably in the political arena as well.
She now owns stakes in companies that own television, radio and newspaper networks. These are not random investments, nor are they a rather odd push to diversify away from the mining sector.
Naturally, Rinehart’s company Hancock Prospecting isn’t commenting. All we’ve got to go on is the two-sentence statement released after the Ten Network buy: ”Our company group is interested in making an investment towards the media business given its importance to the nation’s future and has selected Ten Network for this investment.”
The inclusion of the phrase “the nation’s future” is instructive, particularly when you spend some time on the website of Hancock Prospecting.
If Rinehart is trying to get an audience for her views, an article posted on the site on December 2 from Australian Resources and Investment magazine sets out those views very clearly.
Rinehart’s central argument is that Australia’s mining industry — and its wider prosperity — has been placed under threat by the Mining Resource Rent Tax, which will push investment out of Australia and towards rising mining superpowers, such as Africa and Mongolia.
While Australia’s proximity to Asia has given it a natural advantage over other nations, Rinehart argues, investments in infrastructure such as ports, ships and rail in other countries mean this “protection” is being eroded.
She argues that if the MMRT puts further pressure on investment, the future of the sector is bleak:
“Why then is our country even considering ways to further erode our competitive position and lose investment? I can’t understand the logic of doing so, not when Australia needs increasing revenue to provide for its defence, health care, increased aged population, police and other needs.
“We need viable industries and more investment to support all this and more and to provide good futures for our children.”
Rinehart has even set up a lobby group called the Australians for Northern Development & Economic Vision to push this view. You can see the list of members — including a number of well-known mining sector figures — here.
Many would question whether buying stakes in media companies will give Rinehart an opportunity to talk about her views on air or in print. I’d say no, but Rinehart’s investments are a way of making her voice clearly heard well beyond the mining sector.
Remember, it’s only a few months since Rinehart and fellow West Australian iron ore magnate Andrew Forrest had to use a much-lampooned rally on the streets of Perth to get their views on the mining tax heard, after claiming to have been locked out of negotiations on the matter.
Now that Rinehart is a media owner with multiple investments, she will be hoping her views don’t go unheard again.