Generational change looms for some high-profile local business families.
THE return of the mining boom, which has governments excited because of the tax-raising potential, is also causing excitement among Perth’s wealthiest families, with the winds of generational change blowing through the Stokes, Rinehart, Wright and Bennett clans.
Todd Bennett’s short-lived plunge into gold mining as a director of Apex Minerals (mentioned briefly here last week) was a flash of what’s to come as the sons and daughters of the rich and famous start to make their mark on business.
The rise of Ryan Stokes as a public figure speaking on subjects normally left to father, Kerry, is another example of the baton being passed on.
Over at the Rinehart compound there is less public evidence of change, yet, but there is no doubt that Bianca Rinehart is being groomed to fill mother, Gina’s, shoes
Down in the South West, Alex Wright is slowly assuming charge of the Voyager Estate winery from her father, Michael.
It was while visiting the South West – and after the public appearances of Todd Bennett and Ryan Stokes – that Bystander started to appreciate the extent of the family changes under way, and how a lot of what’s happening is linked to money or, more specifically, how to spend it.
With the Rinehart and Stokes families, it is still mum and dad making the investment decisions, for now.
However, it will only be a few years before Ryan Stokes assumes control of Seven Group, or goes out on his own, with much the same sure to happen at the Rinehart family with Bianca already exhibiting the business skills of her later father, Frank, and dogged determination of her grandfather, Lang Hancock.
But the family which might yet prove most interesting of all is that of the late EA (Peter) Wright, the other half of the famous Hancock and Wright duo which negotiated a fabulous royalty payment from the Rio Tinto subsidiary, Hamersley Iron, in the earliest days of Pilbara iron ore industry, and now split an annual cheque of more than $240 million.
Half of that money, about $120 million, goes to the Hancock/Rinehart side of the deal, and half to the Wright-Bennett side. In future years, the avalanche of money will grow larger courtesy of the boom.
Now comes the tricky question (we should be so lucky) – what to do with the cash?
Michael Wright is content to concentrate on Voyager, creating one of Australia’s great vineyard/winery/restaurant complexes (more on that later). He is being assisted increasingly by daughter, Alex, and aided in times of the wine glut by those Hamersley royalty cheques.
The Bennett side of the family is more anxious to catch the next wave of the boom, not wanting to miss a once-in-a-lifetime opportunity, with the recent sale of mum’s house for an Australian record $57 million perhaps another sign of change ahead.
Todd’s brief adventure at Apex was also a glimpse of what might come next as the Bennett money goes mining on its own, even if that means doing it separately from the Wright side of the family.
In other words, the Hamersley royalty, which has funded the rise of the Rineharts, might soon be funding the rise of the Bennetts.
AS the Bennetts and Wrights head off in their different directions, potentially ending more than 50 years of close business association, there is another division that must also soon get a public airing – the Wright-Rinehart dispute.
More than two years ago, a court case involving ownership of the Rhodes Ridge iron ore deposit came to an end. Parties to the case were the descendants of Lang Hancock (Gina Rinehart) and the descendants of Peter Wright.
No decision has yet been handed down, with both sides showing astonishing patience with the judicial process.
But there must come a time when a judge gets a gentle prod from someone such as the attorney-general saying that 27 months is perhaps long enough to make a decision.
What adds spice to the judgment over Rhodes Ridge is that it is unlikely to be the end of the matter, with ambitious mining-claim pegger, Cazaly Resources, working on a way to re-start its attempts to snatch control of the iron ore deposit, arguing that it should have been developed decades ago under WA’s ‘use it, or lose it’ mining laws.
At stake in this complex case of legal arguments is an iron ore prize worth at least $10 billion, big enough to keep the debate going for years.
Surviving down south
MEANWHILE, down in the vineyards, the real reason for Bystander’s South West tour, the pressures of the wine glut are obvious with two classes of wine-producer emerging – winners and losers.
Most of the small vineyards, with the exception of those used as lifestyle retreats by the idle rich of Perth, are struggling, with more failures a certainty as banking pressures mount and wine prices remain stuck in the cellar.
Big name wineries, such as Vasse Felix and Cape Mentelle, are hanging in, but certainly not prospering with sales volume down by an average of 30 per cent, and revenue almost certainly down by more.
Surviving the pressures, and continuing to invest as if there is no crisis is Voyager Estate, where the Wright family steadily re-invests a small portion of its iron ore royalty cheque with vine plantings now covering most of the good soil, production heading towards 70,000 cases (from its current 40,000), the shop area of the restaurant being re-designed, and plans laid for a helipad to cater for airborne tourists.
AS a final word on the South West, it is pleasing to report that the local real estate agents are not fibbing; property demand is rising, as shown in Bystander’s annual count of for sale signs along Caves Road. A year ago, in the stretch from the Margaret River turn-off to Dunsborough, there were more than 30 signs. Today, there are 20, with some also featuring sold stickers, more evidence that the boom is returning.
“People who pay for things never complain. It’s the guys you give something to for free that you can’t please.”