Australian billionaire Gina Rinehart has signed an agreement which could see the live export of as many as 300,000 cattle a year to China.
Mrs Rinehart’s Hancock Prospecting announced late on Thursday that it had reached a strategic cooperation agreement with a Chinese joint venture company which would give it a beef supply chain stretching from the Australian paddock to the Chinese plate.
The non-binding agreement is with Zhejiang Aozhou Cattle Industry Co Ltd which will develop a feed-lot and processing centre for imported cattle on Jintang Island in north-eastern China, Hancock said in a statement.
“The Jintang facility will have a capacity of 150,000 head per annum, with the potential to expand that capacity to up to 300,000 head per annum in the future as growth allows,” it said.
“Hancock intends to redirect the sale of suitable cattle from its northern cattle stations from other live export channels … with shortfalls to be purchased from other exporters.”
Broome, Derby and Darwin are closest to Mrs Rinehart’s northern pastoral holdings, but Hancock has indicated other ports may be used.
Aozhou would sell and distribute the resulting beef products in the Yangtze Delta region, it added.
Chinese agribusiness giant New Hope Group — which has invested hundreds of millions of dollars in meat works and dairy farming in Australia — is one of the companies behind Aozhou, along with Chinese asset manager, Harvest Fund; Zhejiang Seaport Group; and the Sino-Australia Modern Industry Park.
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It is understood Hancock is looking at taking a minority share in Aozhou, and that the two companies will seek to establish a two-thirds/one-third joint venture in Australia to buy, feed and export cattle to China.
That would give Mrs Rinehart a stake across the entire supply chain, but any deal would be subject to Foreign Investment Review Board and Chinese government approvals, Hancock said.
Hancock Executive Chairman Mrs Rinehart has welcomed the opportunity.
“Australia needs to export currently two-thirds of its cattle, so overseas markets must continue to be developed if we are to grow our cattle industry,” she said.
“Growing our cattle industry helps the many related industries, not just the stations themselves, but also the trough and tank suppliers, the contractors and truckers, accountants and other consultants, and more.”
She promised that “Australian and Chinese operations will be conducted to the highest animal welfare standards.”
By Dominique Schwartz