Iron ore billionaire Gina Rinehart to supply China with infant formula

Gina Rinehart, the Australian billionaire who built her fortune on iron ore, is planning a A$500 million (HK$3.38 billion) investment to supply infant formula to a Chinese market forecast to almost double over three years.

Hope Dairies, controlled by Rinehart's closely held Hancock Prospecting, is seeking to acquire about 5,000 hectares of farmland in the state of Queensland and is targeting first production in the second half of 2016, according to co-investor and director Dave Garcia.

The move positions Rinehart, the richest woman in Asia, to compete in an infant formula mainland market forecast to swell after the central government loosened its one-child policy last year.

"There's another 50 million mouths probably coming online," Garcia said. "There's room for everyone in this right now."

Hope Dairies, named after Rinehart's mother, is seeking pasture in Queensland's South Burnett region and a processing facility in the Mary Valley. The dairy farm, which is planned to be among Australia's biggest, may produce as much as 30,000 tonnes of formula a year, Garcia said. The facility will also supply UHT milk.

All the output is intended to be exported to China and the company will have investment partners including a Chinese entity, Jason Morrison, a spokesman for Rinehart's Hancock Prospecting, said yesterday. Morrison, who said Hope Dairies will be 70 per cent owned by Rinehart, declined to name the Chinese partner before an official announcement scheduled today.

A free-trade deal with China, seen as a boost to dairy exports, might be signed next week, Australian Prime Minister Tony Abbott said this week.