Roy Hill posts $4.4bn profit

Iron ore miner Roy Hill Holdings doubled its profit last year to $4.4 billion, triggering a big dividend payout to shareholders led by Gina Rinehart’s Hancock Prospecting.

The miner paid $4.1 billion in dividends to its owners in respect of FY21, with a further $1.5 billion paid in October 2021.

These were the first dividend payments to its shareholders, which comprise Hancock Prospecting (70 per cent), Marubeni (15 per cent), POSCO (12.5 per cent) and China Steel Corporation (2.5 per cent).

Roy Hill is the largest revenue and profit earner for Hancock Prospecting.

The dividends followed the repayment of all outstanding loans under the company’s revolving credit facilities.

The company said ongoing, strong operational performance enabled it to capture the high iron ore prices that prevailed during FY21, with higher shipped tonnages.

Roy Hill achieved a record annual run rate of more than 60 million tonnes in the three months to June 2020.

This followed $494 million of investment in the business, including the first Jaw Gyratory Crusher to be installed above ground in Australia.

It has also continued to invest in autonomous haulage and a Wet High Intensity Magnetic Separator plant, which it said has increased yield and contributed to higher production.

An expansion to this facility has commenced, with the capacity to add an anticipated 1mt per annum of high iron concentrate, low-alumina product that will be blended with Roy Hill fines.

The company said it paid $571 million in state royalties, with a further $1.39 billion in company tax payments to the end of June 2021.

Executive chairman Gina Rinehart attributed the strong result to multiple factors.

“The remarkable performance of Roy Hill on all fronts reflects a high degree of planning and execution excellence, the ongoing agility of the business to adapt to challenges, and the dedication of our people,” she said.

Mrs Rinehart took the opportunity to repeat her calls for less government regulation.

“The importance of mining to Australia has never been more evident than during the 2020-21 financial year, a time in which I am immensely proud of Roy Hill and our people, and their contribution to safeguarding the economic prosperity of WW and Australia.

“The mining industries and the businesses they support help to support millions of Australians right across the country.

“When mining does well, so does Australia.

“We just have to remember that Australia exports its ore internationally, so we have to be cost competitive internationally, hence we should be wary of onerous government cost burdens that don’t encourage investment.”