Australia’s richest woman has thrown a billion-dollar lifeline to embattled West Australian mining tycoon Chris Ellison just days before she learns the outcome of an investigation into alleged tax evasion.

Gina Rinehart’s Hancock Prospecting will spend $1.13 billion on Mineral Resources’ oil and gas projects in the Perth Basin and exploration acreage in the Carnarvon Basin.

It comes at a critical time for Mineral Resources, which is struggling with debt as well as being investigated by Australia’s corporate watchdog ASIC for alleged tax evasion.

So why has Ms Rinehart lashed out now, checkbook in hand, and how will it change the face of WA’s gas industry?

Tax evasion scandal

Earlier this month, Nine Newspapers alleged that Mr Ellison and four other senior Mineral Resources executives defrauded taxpayers and company shareholders of approximately $7 million by transferring company funds to a series of accounts located in the British Virgin Islands (BVI). I don’t have to pay income tax.

Mr Ellison and his associates allegedly arranged for Mineral Resources to buy mining equipment from BVI companies at sky-high prices, which then transferred the spoils to individual offshore accounts on which they paid no tax.

The investigation also alleged that Mineral Resources used the inflated prices it paid for the machines to claim increased tax deductions on depreciation costs.

Mineral Resources’ board of directors has hired law firm Herbert Smith Freehills to investigate the allegations, and the results of that investigation are expected to be announced Monday.

Lifeline for MinRes

Resources industry analyst Tim Treadgold said the importance of the agreement for Mineral Resources could not be underestimated.

“It’s not exactly a get-out-of-jail-free card, but it’s not far off,” he said.

“In developing the Onlsow project, they took on huge debts in the iron ore division, and they did so at the wrong time because their lithium assets were also in trouble.”

“(Ms. Rinehart) probably could have gotten a lower price from Ellison, but she also appears to have lent a helping hand.”

What good does it do for Rinehart?

Mr Treadgold said the acquisition would build on Hancock Prospecting’s existing assets in the Perth Basin and position the company alongside Beach Energy as a top player in WA’s gas industry.

“(Ms Rinehart) already owns assets in the Perth basin adjacent to those owned by MinRes and plays the role of what you might call a Perth basin gas consolidator,” he said.

“He, along with Strike Energy and its partners, will be the one to bring more gas to the Perth market.”

What does it mean for gas in WA?

Western Australia has some of the largest offshore gas reserves in the world, but most is exported overseas.

The state government last month lifted the ban on onshore gas exports in efforts to increase domestic gas supplies.

The recent acquisition of Hancock Prospecting could also support those efforts, Mr. Treadgold said.

“This is actually a very encouraging move for Perth gas supply because it means the assets are now in the hands of people who can afford to develop them,” Mr Treadgold said.

“Rinehart will bring its gas assets and MinRes into production, and both will eventually transport some of their gas offshore through export agreements with the North West shelf.”

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