A push into cattle has made Gina Rinehart the NT’s biggest landholder, and seen her enlist the help of former chief minister and fracking proponent Adam Giles. By Mike Seccombe.

Gina Rinehart’s cattle stations, Adam Giles and fracking prospects

If it were not plain enough already that the riven, scandal-plagued Northern Territory government of Adam Giles was heading for massive defeat at last August’s election, the open letter released to the media five days out from polling made it crystal clear.

The letter, signed by about one-third of territory pastoralists, including some of the biggest operators, did not actually instruct people to vote Labor, but it might as well have.

It implored electors to vote against fracking for natural gas, which it warned posed a “potentially catastrophic” threat to the NT environment and pastoralists’ livelihoods. Labor was promising a moratorium on fracking; Giles and his Country Liberal Party were gung-ho in favour of the controversial gas extraction method.

ALP strategists were delighted because, historically, the pastoral industry overwhelmingly backed the conservatives. As one party operative puts it: “They hated us for the ban on live cattle exports, among other things.”

But here was a sizeable chunk of the industry putting itself at odds with their peak lobby group, the very conservative Northern Territory Cattlemen’s Association, and openly turning on the government. There could hardly have been a more telling portent of the electoral landslide to come.

And when it came it was huge. The Country Liberal Party was all but wiped out, managing to cling to just two of 25 seats in the parliament. Among those swept away were all the leadership, including Giles himself.

Just deserts, many would say. Giles ran a shambolic government. He gained the leadership by treachery, staging a coup against his predecessor Terry Mills while Mills was on a trade mission to Japan. His three-year tenure was marked by numerous defections, corruption allegations and other scandals, attempted leadership coups, internecine party warfare and 18 cabinet reshuffles. A full year before the election defeat a poll by the NT News found 71 per cent of people had no trust in Giles.

There was simply no way back, politically, for Adam Giles. Luckily for him, however, he had cultivated friends in high places.

On January 25 came the announcement that he had landed a job working for Australia’s richest woman, Gina Rinehart. He was appointed general manager of external affairs for the pastoral arm of her company, Hancock Prospecting.

“I have known and regarded Adam highly since prior to his time as chief minister and look forward to the contribution he can make to our company, and, continue to make for northern Australia,” Rinehart said in a statement announcing the appointment.

“Our continued involvement in the Australian beef industry and our north is an important focus for the future of the Hancock Prospecting Group.”

Exactly what value she sees in a failed and widely distrusted politician such as Giles is open to question, and we’ll come back to that question. But there can be no disputing the second part of that statement, at least.

1 . Rinehart's huge investment in cattle

People have long associated Gina Rinehart with mining, particularly iron ore mining, but over recent times it is her push into beef that has been more notable.

The biggest news came in December, with the purchase of the storied Kidman cattle empire, comprising some 8,000,000 hectares of land spread over Queensland, Western Australia, South Australia and the Northern Territory.

The sheer size of the deal was one point of interest. Another was the fact that a Chinese partner, Shanghai CRED, took a one-third stake in the joint-venture company Australian Outback Beef (AOB). There was no doubt Rinehart saw China as a target market for more than just minerals.

Further confirmation of Rinehart’s intentions came this week when she turned up in Warwick, Queensland, media in tow, to see the first shipment of her frozen, boxed wagyu beef loaded for export to China. Twelve tonnes were bound for high-end restaurants in Shanghai and Beijing, where, the ABC reported, premium steaks go for up to $400 each.

Only days before, Shanghai CRED sent out Australia’s first shipment of 1200 live cattle from Portland in Victoria, bound for Shandong province in eastern China.

Well before this, however, and well before the Kidman purchase, Rinehart was spending big on beef. The Kidman sale price was $386.5 million, but by some estimates she’s outlaid another $300-odd million on other properties. She is now by far the biggest landholder in the territory.

Which brings us back to that open letter signed by pastoralists just before last year’s election.

“We put that list [of signatories] together in a couple of weeks,” says the initiator of the protest, Colin Ross, whose family enterprise, North Star Pastoral, runs about 75,000 head of cattle on 800,000 hectares of land.

“There’s only about 220 stations in the territory, but some of these pastoralists are a bit hard to find. If we’d had longer, I reckon we could have got a lot more.”

But there was one notable large landholder Ross did not approach: Rinehart. There didn’t seem a lot of point to trying. Gina Rinehart does not only want to be big in beef; she wants to be big in fracking, too.

“A lot of the land she owns is prime fracking country,” says one political operative. “The rumour in the pastoral community is Gina wants to frack the shit out of the land she owns.”

Back when she bought the Kidman properties, Rinehart spoke of the need to diversify. “Right now all our eggs are in the iron ore basket,” she said.

What better way to diversify than to stake an interest in two commodities likely to have big growth potential: gas and protein?

Chinese beef and veal consumption has increased sevenfold over the past quarter century. Gas will be the transitional fuel as the world moves away from more carbon-intense sources such as coal towards renewables.

Not that Rinehart believes in human-induced climate change. She is a big supporter of denialists. But she is an astute business person, and one can easily see that the idea of making money from that which comes off the top of the land and also from that which comes from beneath it might have appeal.

2 . Contested exploration agreements

While it was still in power, the Giles government was very happy to help her achieve that aspiration.

On March 21, 2015, the government announced it had granted dual licence approval to Minerals Australia and Jacaranda Minerals, a Rinehart subsidiary, to explore for gas across 6583 square kilometres of Top End land. The press release called it “historic”.

It began: “The Territory Government is creating more jobs and opportunities in remote communities with the granting of the first petroleum exploration permits on Aboriginal land managed by the Northern Land Council.”

And it continued, quoting Giles: “My Government is committed to creating jobs in our regions and breaking the cycle of welfare dependency that has been crippling our communities.”

It further quoted a rusted-on Giles supporter and the then mines and energy minister, David Tollner: “This demonstrates that traditional owners and the resources industry can both win when they work together.”

The trouble was a lot of the traditional owners claimed no knowledge of the deal to which they had supposedly agreed. Ten days after the announcement, they wrote to Giles, protesting: “We were not told about the risks to our health, water and environment from fracking and shale gas drilling. We do not want any fracking for gas to go ahead on our land.”

At a subsequent meeting attended by the Mangarrayi and Alawa traditional owners – along with a contingent of pastoralists, tourism operators and anti-fracking activists – they presented the chief executive of the Northern Land Council, Joe Morrison, with a letter from a lawyer representing more than 300 people who were disputing that consent had been given.

“There are now 380 traditional owners who have signed up with Maurice Blackburn to challenge the validity of the permits,” says Lauren Mellor, campaigner for the anti-fracking group Lock the Gate Alliance.

“The entire region where the permits cover has sensitive underground hydrology, spring-fed rivers, connecting into the Roper River. It also surrounds the Mataranka Thermal Springs, an iconic tourist area.”

The legal dispute has dragged on for 18 months so far, and the opponents are still awaiting the release of documents relating to the approval and consultation process.

3 . Giles's China connections

Asked for his assessment on why Giles was hired, one former ministerial colleague of Giles’s says, flippantly: “As a mascot.”

More seriously, he offers: “Adam put a lot of work into courting Gina. She loves him.”

He does not mean that in a romantic sense. He means they share the same develop-at-all-costs mentality, the same belief in the potential of northern Australia, the same views about Aboriginal welfare, and the same disdain for greenies and climate change activists and interventionist government.

“And,” says the former colleague, more seriously yet, “there’s no doubt he has good contacts in China.”

The former colleague points to the 2015 deal the Giles government did leasing the Port of Darwin to the Chinese Landbridge group for 99 years, for $506 million.

Landbridge’s reported ties to the People’s Liberation Army caused grave security concerns to America and embarrassment to the Australian government. Giles couldn’t have cared less. It was, as he said, “a fantastic outcome for the territory”.

Subsequently, just a few weeks before he lost government, Giles signed another agreement with Landbridge, to build a $250 million hotel on the Darwin waterfront.

Giles is seen by the Chinese as a man prepared to do deals, and not squeamish about who he is dealing with, says the source.

4 . Fracking lobbying to follow inquiry

There are other theories, too, about Giles’s role. One is that he might act as a door-opener in the territory.

One might think, though, that the new Labor administration may not be particularly receptive to lobbying from a former opponent. But that ignores the power of money. Gina Rinehart’s wealth may have plunged with commodity prices over recent years, from a peak of $31 billion to $6 billion mid last year, according to The Australian Financial Review’s Rich List, but that still roughly equals the NT budget.

As we said earlier, the Labor government has put a moratorium on fracking, pending the outcome of an inquiry into its safety and viability, chaired by Justice Rachel Pepper of the NSW Land and Environment Court. When it reports, probably later this year, the lobbying will begin. It seems unlikely that the new government could ignore representations from Rinehart’s agents.

Whether that lobbying role will be Giles’s, we don’t know. Rinehart’s company did not respond to The Saturday Paper’s approach for comment. Last August Rinehart hired another former Liberal politician, Sophie Mirabella, to be general manager of government and media relations for Hancock Prospecting.

But politicians are not the only ones who will need duchessing, if Gina Rinehart’s ambitions as a gas and beef producer are to be advanced. Above all, the pastoral industry also needs to be brought onside.

The Northern Territory Cattlemen’s Association has already shown itself to be receptive. Its president, Tom Stockwell, greeted Giles’s appointment with enthusiasm.

“It’s a really positive thing for the northern cattle industry that Hancock’s approaching this with some enthusiasm and getting an ex-chief minister in there that knows about the north and knows about our developing relations with Asia,” he said at the time.

He looked forward to close co-operation with Giles.

Others are more cynical.

“He’s her real estate agent,” says one in the industry. “His job will be to persuade them of the benefits of fracking on their land. Or to buy them out.”

It’s going to be a tough sell.

“I’m adamantly opposed. A lot of us are,” says pastoralist Colin Ross.

“We’ll keep fighting it. I really hope that Gina, now she’s one of the biggest pastoralists, has come to understand the risk to long-term pastoral viability from the short-term gain of fracking.”

This article was first published in the print edition of The Saturday Paper on February 11, 2017 as "Rinehart beefs up fracking prospect".

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Mike Seccombe is The Saturday Paper’s national correspondent.

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